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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 41 the requirement not to enter into tax avoidance arrangements

FA00/SCH22/PARA41

(1) It is a condition of remaining within tonnage tax that a company is not a party to any transaction or arrangement that is an abuse of the tonnage tax regime.

(2) A transaction or arrangement is such an abuse if in consequence of its being, or having been, entered into the provisions of this Schedule fall to be applied in a way that results (or would but for this paragraph result) in-

(a) a tax advantage being obtained for-

(i) a company other than a tonnage tax company, or

(ii) a tonnage tax company in respect of its non-tonnage tax activities,

or

(b) the amount of the tonnage tax profits of a tonnage tax company being artificially reduced.

(3) In this paragraph “tax advantage” has the same meaning given by Section 840ZA of the Taxes Act 1988 (tax avoidance) (see section 709 of that Act).

(4) A lease is not to be taken as being an abuse of the tonnage tax regime by reason of the lessor obtaining capital allowances as a result of the lease being, or having been, entered into. In this sub-paragraph “lease”, and “lessor” in relation to a lease, have the meaning given by para 89(2)

References

Abuse of Tonnage Tax regime TTM05501