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HMRC internal manual

Tonnage Tax Manual

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HM Revenue & Customs
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Schedule 22 Finance Act 2000: Part IX the ring fence - capital allowances - Para 75 during - plant and machinery - change of use of Tonnage Tax asset

FA00/SCH22/PARA75

(1) This paragraph applies where, at a time when a company is subject to tonnage tax, plant or machinery used for the purposes of the company’s tonnage tax trade begins to be used wholly or partly for purposes other than those of that trade.

(2) If the asset was acquired before entry into tonnage tax, section 61(1)(e) of the Capital Allowances Act 2001 applies (disposal event if plant or machinery begins to be used wholly or partly for purposes other than those of the qualifying activity), but reading the reference in that provision to the qualifying activity as a reference to the tonnage tax trade.

(3) If the asset was acquired after entry into tonnage tax and begins to be used wholly or partly for the purposes of a qualifying activity carried on by the company, section 13 of the Capital Allowances Act 2001 (use for qualifying activity of plant or machinery provided for other purposes) applies as follows-

(a) references to purposes which were not those of any qualifying activity shall be read as including references to the purposes of the tonnage tax trade, and

(b) references to the qualifying activity carried on by him shall be read as not including references to the tonnage tax trade.

History

Amended by Schedule 2 CAA 2001. Up to 31st March 2001 subparagraphs 2 and 3 read:

(2) If the asset was acquired before entry into tonnage tax, section 24(6)(c)(iv) of the Capital Allowances Act 1990 applies (disposal value to be brought into account on plant of machinery beginning to be used wholly or partly for purposes other than those of the trade for which it was provided).

The reference to the trade shall be read as a reference to the tonnage tax trade.

(3) If the asset was acquired after entry into tonnage tax and begins to be used wholly or partly for the purposes of a qualifying activity carried on by the company, section 81(1)(a) of the Capital Allowances Act 1990 (effect of use after user not attracting capital allowances) applies as follows-

(a) the reference to the trade shall be read as a reference to the qualifying activity (and as not including a reference to the tonnage tax trade), and

(b) the reference to purposes such that the expenditure has not been taken into account in computing any capital allowance shall be read as including the purposes of the tonnage tax trade.

References

Change of use of Tonnage Tax asset TTM09110