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HMRC internal manual

Tonnage Tax Manual

Schedule 22 Finance Act 2000: Part XII groups - Para 126 meaning of ‘dominant party’ in relation to merger


(1) This paragraph explains what is meant by the references in this Schedule to the “dominant party” in relation to a merger.

(2) The “dominant party” is determined as follows-

(a) if the turnover generated by the relevant activities of one of the parties to the merger is more than twice that of the other, that one is the dominant party;

(b) if not, there is no dominant party.

(3) The relevant activities of a party to a merger are-

(a) for the purposes of-

(ii) paragraph 122 (merger between tonnage tax groups or companies), or

(iii) paragraph 123 (merger between tonnage tax group or company and qualifying non-tonnage tax group or company),

the tonnage tax activities of that party;

(b) for the purposes of paragraph 125 (merger between non-qualifying group or company and qualifying non-tonnage tax group or company), all the activities of that party.

(4) The basis on which (and the periods by reference to which) the turnover from relevant activities is to be determined for the purposes of those paragraphs shall be such as may be agreed between the parties and the Inland Revenue.

(5) In default of such agreement-

(a) the Inland Revenue shall decide, and

(b) an appeal may be made against their decision.

(6) Notice of appeal must be given to the Inland Revenue within 30 days of their decision being notified to the parties.


Meaning of ‘dominant party’ TTM12350
Meaning of ‘relevant activities’ TTM12360