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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 85 exit - plant and machinery

FA00/SCH22/PARA85

(1) If a company leaves tonnage tax-

(a) the amount of qualifying expenditure under Part 2 of the Capital Allowances Act 2001 (plant and machinery allowances), and

(b) the pools to which such expenditure is to be allocated for the purposes of that Part,

shall be determined under this paragraph.

(1A) Sub-paragraph (1C) applies where the company leaves tonnage tax-

(a) on the expiry of a tonnage tax election, or

(b) on a tonnage tax election ceasing to be in force under paragraph 13(2A) (taking effect of withdrawal notice under paragraph 15A).

(1B) In any other case, sub-paragraph (2) applies.

(1C) Where this sub-paragraph applies, the amount of qualifying expenditure in respect of each asset used by the company for the purposes of its tonnage tax activities and held by the company when it leaves tonnage tax shall be taken to be-

(a) the market value of the asset at the time the company leaves tonnage tax, or

(b) if less, the amount of expenditure incurred on the provision of the asset that would have been qualifying expenditure if the company had not been subject to tonnage tax.”.

(2) Where this sub-paragraph applies, for each asset used by the company for the purposes of its tonnage tax activities and held by the company when it leaves tonnage tax there shall be determined-

(a) the amount of expenditure incurred on the provision of the asset that would have been qualifying expenditure if the company had not been subject to tonnage tax, and

(b) the written down value of that amount by reference to the period since the expenditure was incurred.

(3) The Inland Revenue shall make provision by regulations as to the basis on which the writing down is to be done.

The regulations may make different provision for different descriptions of asset.

History

Amended by Schedule 2 CAA 2001. Up to 31st March 2001 subparagraph 1 read:

(1) If a company leaves tonnage tax-

(a) the amount of qualifying expenditure under Part II of the Capital Allowances Act 1990 (plant and machinery), and

(b) the pools to which such expenditure is to be allocated for the purposes of that Part,

shall be determined under this paragraph.

References

Qualifying expenditure on exit TTM09300
   
Withdrawal notice or expiry of an election TTM20013