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HMRC internal manual

Tonnage Tax Manual

From
HM Revenue & Customs
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Schedule 22 Finance Act 2000: Part X the ring fence - capital allowances - ship leasing - Para 97 quantitative restrictions - treatment of disposal proceeds

FA00/SCH22/PARA97

(1) The following provisions apply where-

(a) there is a disposal of a ship in relation to which paragraph 94 applies to restrict the capital allowances available, and

(b) a disposal value falls fall to be brought into account.

The reference in paragraph (a) to a disposal of ship includes a disposal of a part of a ship, or of an interest in a ship or a part of a ship.

(2) The disposal value is first allocated between the tonnage tax (main rate) pool and the tonnage tax (special rate) pool in the same proportions as the cost of providing the ship was allocated to those pools.

(3) If the amount allocated to the tonnage tax (main rate) pool exceeds the amount of qualifying expenditure remaining in that pool, any excess shall be taken to the tonnage tax (special rate) pool.

(4) A balancing charge arises only if the amount taken to the tonnage tax (special rate) pool exceeds the amount of qualifying expenditure remaining in that pool.

References

Disposals TTM10450