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HMRC internal manual

Tonnage Tax Manual

HM Revenue & Customs
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Schedule 22 Finance Act 2000: Part VI relevant shipping profits - Para 49 relevant shipping income - distributions of overseas shipping companies


(1) Income of a tonnage tax company consisting in a dividend or other distribution of an overseas company is relevant shipping income if the following conditions are met.

(2) The conditions are-

(a) that the overseas company operates qualifying ships;

(b) that more than 50%; of the voting power in the overseas company is held by a company resident in a member State, or that two or more companies each of which is resident in a member State hold in aggregate more than 50%; of that voting power;

(c) that the 75% limit is not exceeded in relation to the overseas company in any accounting period in respect of which the distribution is paid;

(d) that all the income of the overseas company is such that, if it were a tonnage tax company, it would be relevant shipping income; and

(e) that the distribution is paid entirely out of profits arising at a time when-

(i) the conditions in paragraphs (a) to (d) were met, and

(ii) the tonnage tax company was subject to tonnage tax.

(f) the profits of the overseas company out of which the distribution is paid are subject to a tax on profits (in the country of residence of the company or elsewhere, or partly in that country and partly elsewhere).

(3) For the purposes of sub-paragraph (2)(c) the “75%; limit” is the requirement set out in paragraph 37 (requirement that not more than 75%; of tonnage is chartered in) as it applies to a single company.

(4) In this paragraph an “overseas company” means a company that is not resident in the United Kingdom.


Distributions of overseas shipping companies TTM06400