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HMRC internal manual

Tonnage Tax Manual

From
HM Revenue & Customs
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Schedule 22 Finance Act 2000: Part II Tonnage Tax elections - Para 12 when election takes effect

FA00/SCH22/PARA12

(1) The general rule is that a tonnage tax election has effect from the beginning of the accounting period in which it is made.

This is subject to the following exceptions.

(2) A tonnage tax election made during the further period cannot have effect in relation to an accounting period beginning before 1st January 2005.

If the general rule would produce that effect, the election has effect instead from the beginning of the accounting period following that in which it is made.

(3) The Inland Revenue may agree that a tonnage tax election made during the further period shall have effect from the beginning of an accounting period earlier than that in which it is made (but not one beginning before 1st January 2005).

(4) The Inland Revenue may agree that a tonnage tax election made during the further period shall have effect from the beginning of the accounting period following that in which it is made.

In exceptional circumstances they may agree that it shall have effect from the beginning of the accounting period following that one.

(5) In the case of a group election in respect of a group where the members have different accounting periods-

(a) sub-paragraph (1), or

(b) any agreement under sub-paragraph (3) or (4),

has effect in relation to each qualifying company by reference to that company’s accounting periods.

(6) A tonnage tax election under paragraph 10(2) or (3) (election in consequence of company becoming a qualifying company) has effect from the time at which the company in question became a qualifying company.

This is subject to paragraph 38(2)(a) and (b) (effect in certain cases of exceeding the 75%; limit on chartered in tonnage).

References

General rule on when election takes effect and exceptions TTM02200