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HMRC internal manual

Tonnage Tax Manual

From
HM Revenue & Customs
Updated
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Schedule 22 Finance Act 2000: Part V other requirements - Para 38 the 75 per cent limit - election not effective if limit exceeded

FA00/SCH22/PARA38

(1) Where a tonnage tax election is made before the end of the initial period and the 75%; limit is exceeded in the first relevant accounting period, the election is treated as never having been of any effect.

(2) Where a tonnage tax election is made after the end of the initial period, then-

(a) if the 75%; limit is exceeded in the first relevant accounting period, the election does not have effect in relation to that period;

(b) if the 75%; limit is exceeded in the first and second relevant accounting periods, the election does not have effect in relation to either of those periods; and

(c) if the 75%; limit is exceeded in the first, second and third relevant accounting periods, the election is treated as never having been of any effect.

(3) For the purposes of sub-paragraphs (1) and (2) the first, second or third relevant accounting period means-

(a) in relation to a single company, the accounting period that, if the election had been effective, would have been the first, second or third accounting period of the company after its entry into tonnage tax;

(b) in relation to a group, the accounting period that, if the election had been effective, would have been the first, second or third accounting period of a member of the group that would have been a tonnage tax company.

(4) Sub-paragraphs (1) and (2) do not apply to a renewal election.

References

Effect of exceeding 75 per cent limit TTM05300
   
Election made after ‘initial period’ TTM02410