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PART XIII |
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WITHDRAWAL OF RELIEF ETC. ON COMPANY LEAVING TONNAGE TAX |
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Introduction |
| | 128. - (1) This Part of this Schedule applies where a company ceases to be a tonnage tax company.
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(2) The provisions of paragraphs 129 and 130 (exit charges: chargeable gains and balancing charges) apply where a company ceases to be a tonnage tax company-
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(a) on ceasing to be a qualifying company for reasons relating wholly or mainly to tax, or |
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(b) under paragraph 42 (exclusion from tonnage tax where tax avoidance arrangements entered into). |
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(3) Paragraph 131 (ten year disqualification from re-entry into tonnage tax) applies in every case where a company ceases to be a tonnage tax company otherwise than on the expiry of a tonnage tax election.
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Exit charge: chargeable gains |
| | 129. - (1) Paragraph 65(1)(a) (chargeable gain: disposal of tonnage tax assets) has effect in relation to gains (but not losses) on all relevant disposals as if the company had never been a tonnage tax company.
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(2) For this purpose a "relevant disposal" means a disposal-
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(a) on or after the day on which the company ceases to be a tonnage tax company, or |
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(b) at any time during the period of six years immediately preceding that day when the company was a tonnage tax company. |
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(3) Where sub-paragraph (1) operates to increase the amount of the chargeable gain on a disposal made at a time within the period mentioned in sub-paragraph (2)(b), the gain is treated to the extent of the increase-
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(a) as arising immediately before the company ceased to be a tonnage tax company, and |
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(b) as not being relevant shipping profits of the company. |
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(4) No relief, deduction or set-off of any description is allowed against the amount of that increase or the corporation tax on that amount.
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Exit charge: balancing charges |
| | 130. - (1) This paragraph applies if in a relevant accounting period during which the company was a tonnage tax company it was liable to a balancing charge in relation to which paragraph 78 (phasing-out of balancing charges) applied to reduce the amount of the charge.
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(2) For this purpose a "relevant accounting period" means an accounting period ending not more than six years before the day on which the company ceased to be a tonnage tax company.
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(3) The company is treated as having received an additional amount of profits chargeable to corporation tax equal to the aggregate of the amounts by which those balancing charges were reduced.
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(4) Those additional profits are treated-
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(a) as arising immediately before the company ceased to be a tonnage tax company, and |
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(b) as not being relevant shipping profits of the company. |
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(5) No relief, deduction or set-off of any description is allowed against those profits or against corporation tax on them.
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Ten year disqualification from re-entry into tonnage tax |
| | 131. - (1) A company election made by a former tonnage tax company is ineffective if made before the end of the period of ten years beginning with the date on which the company ceased to be a tonnage tax company.
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(2) A group election that-
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(a) is made in respect of a group whose members include a former tonnage tax company, and |
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(b) would result in that company becoming a tonnage tax company, |
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is ineffective if made before the end of the period of ten years beginning with the date on which that company ceased to be a tonnage tax company.
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(3) Sub-paragraphs (1) and (2) do not prevent a company becoming a tonnage tax company under and in accordance with the rules in Part XII of this Schedule (groups, mergers and related matters).
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(4) In this paragraph "former tonnage tax company" means a company that is not a tonnage tax company but has previously been a tonnage tax company.
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Second or subsequent application of this Part |
| | 132. Where this Part of this Schedule applies on a second or subsequent occasion on which a company ceases to be a tonnage tax company (whether or not this Part applied on any of the previous occasions)-
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(a) the references to the company ceasing to be a tonnage tax company shall be read as references to the last occasion on which it did so, and |
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(b) the references to the period during which the company was a tonnage tax company do not include any period before its most recent entry into tonnage tax. |
