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HMRC internal manual

Tonnage Tax Manual

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HM Revenue & Customs
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Tonnage Tax Regulations 2000: Regulation 4

Plant and machinery other than expensive motor cars and long-life assets – writing-down basis

SI00/2303/REG4(1) This regulation applies to any asset mentioned in paragraph 85(2) of Schedule 22, where the provisions of Part II of the 1990 Act would have applied to the asset on the footing that the company had not been subject to tonnage tax (“the tax condition”), other than –

(a) a motor car, to which the provisions of section 34 of the 1990 Act (expensive motor cars) would have effect on that condition, or

(b) a long-life asset, where Chapter IVA of Part II of the 1990 Act would have applied to the capital expenditure incurred on the provision of the asset, on that condition.
(2) The written down value of the paragraph 85(2)(a) amount for the asset shall be determined by multiplying that amount by the percentage given by the table in paragraph (3).

That table is as follows –

Length of qualifying holding period for the asset Percentage of the paragraph 85(2)(a) amount which is qualifying expenditure under Part II of the 1990 Act
   
Less than or equal to 1 year 75
1 year and one day to 2 years 55
2 years and one day to 3 years 40
3 years and one day to 4 years 30
4 years and one day to 5 years 25
5 years and one day to 6 years 15
6 years and one day to 7 years 12
7 years and one day to 8 years 10
8 years and one day to 9 years 5
More than 9 years Nil

(4) References in this regulation and regulations 5 and 6 to the qualifying holding period for an asset are references to the period between –

(a) the date on which the expenditure represented by the paragraph 85(2)(a) amount, or the part thereof, was incurred, and

(b) the date on which the company leaves tonnage tax.

References

Qualifying expenditure on exit TTM09300
   
Assets other than expensive cars TTM09310