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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 XI offshore activities - Para 110 capital allowances - General

FA00/SCH22/PARA110

(1) A tonnage tax company may claim capital allowances for capital expenditure incurred in providing plant or machinery for the purposes of its offshore activities.

(2) In such a case the provisions of Part 2 of the Capital Allowances Act 2001 applies as if-

(a) an asset used for the purposes of the company’s offshore activities were provided by the company for those purposes on the first occasion after entry into tonnage tax on which it is brought into use for those purposes, and

(b) an amount of capital expenditure (the “notional qualifying expenditure”) had been incurred at that time on its provision.

(3) The amount of the notional qualifying expenditure is given by paragraph 112 (existing assets) or paragraph 113 (new assets).

(4) Where an asset to which this paragraph applies ceases permanently to be used for the purposes of the company’s offshore activities, it is treated for the purposes of Part 2 of the Capital Allowances Act 2001 as it applies by virtue of this paragraph as if it had been disposed of at market value.

This does not apply if a disposal value is required to be brought into account under section 61(1) of that Act apart from this sub-paragraph.

History

Amended by Schedule 2 CAA 2001. Up to 31st March 2001 subparagraphs 2 and 4 read:

(2) In such a case the provisions of Part II of the Capital Allowances Act 1990 apply as if-

(a) an asset used for the purposes of the company's offshore activities were provided by the company for those purposes on the first occasion after entry into tonnage tax on which it is brought into use for those purposes, and

(b) an amount of capital expenditure (the "notional qualifying expenditure") had been incurred at that time on its provision.

(4) Where an asset to which this paragraph applies ceases permanently to be used for the purposes of the company’s offshore activities, it is treated for the purposes of Part II of the Capital Allowances Act 1990 as it applies by virtue of this paragraph as if it had been disposed of at market value.

This does not apply if a disposal value is required to be brought into account under section 24(6)(c) of that Act apart from this sub-paragraph.

References

Outline of capital allowance code for offshore activities TTM11300