Flagging: restrictions where ship ceases to be qualifying ship under paragraph 22E

22F

1

This paragraph applies where a qualifying ship operated by a tonnage tax company ceases to be a qualifying ship by virtue of paragraph 22E.

2

No notice may be given under section 130 of the Capital Allowances Act 2001 for the postponement of all or part of a relevant allowance to which—

a

the company, or

b

if immediately before the date on which the ship so ceases to be a qualifying ship (“the cessation date”) the company is a member of a tonnage tax group, any company that is or becomes a member of the group,

becomes entitled on or after the cessation date.

3

In sub-paragraph (2) “relevant allowance” means an allowance in respect of—

a

qualifying expenditure on the provision of the ship, or

b

qualifying expenditure which—

i

is incurred on the provision of the ship, and

ii

is allocated to a single ship pool.

4

No claim may be made under section 135 of that Act for deferment of all or part of a balancing charge—

a

to which the company or, if immediately before the cessation date the company is a member of a tonnage tax group, any company that is or becomes a member of the group becomes liable, and

b

which arises when there is a disposal event in respect of the ship on or after the cessation date.

5

Relief in respect of a relevant loss shall not be given under section 393A(1) of the Taxes Act 1988 (losses: set off against profits of the same, or an earlier, accounting period).

6

Group relief under Chapter 4 of Part 10 of that Act shall not be available in respect of a relevant loss.

7

Accordingly, relief in respect of a relevant loss shall be given only under section 393(1) of that Act (losses other than terminal losses).

8

In sub-paragraphs (5) to (7) “relevant loss” means a loss which is incurred in respect of the ship on or after the cessation date in the course of a trade carried on by—

a

the company, or

b

if immediately before the cessation date the company is a member of a tonnage tax group, any company that is or becomes a member of the group.