Paragraph 41

United Kingdom

(1)

It is a condition of remaining within tonnage tax that a company is not a party to any transaction or arrangement that is an abuse of the tonnage tax regime.

(2)

A transaction or arrangement is such an abuse if in consequence of its being, or having been, entered into the provisions of this Schedule fall to be applied in a way that results (or would but for this paragraph result) in—

(a)

a tax advantage being obtained for—

(i)

a company other than a tonnage tax company, or

(ii)

a tonnage tax company in respect of its non-tonnage tax activities,

(b)

the amount of the tonnage tax profits of a tonnage tax company being artificially reduced.

F1(3)

In this paragraph “tax advantage” has the meaning given by section 840ZA of the Taxes Act 1988.

(4)

A F2... lease is not to be taken as being an abuse of the tonnage tax regime by reason of the lessor obtaining capital allowances as a result of the lease being, or having been, entered into.

F3In this sub-paragraph “lease”, and “lessor” in relation to a lease, have the meaning given by paragraph 89(2).

Annotations

Textual amendments

F1: Sch. 22 para. 41(3) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 395 (with Sch. 2)
F2: Word in Sch. 22 para. 41(4) repealed (10.7.2003) (with effect in accordance with Sch. 32 para. 3 of the amending Act) by Finance Act 2003 (c. 14), Sch. 32 para. 2(1)(a), Sch. 43 Pt. 3(11) (with Sch. 32 para. 4)
F3: Words in Sch. 22 para. 41(4) substituted (10.7.2003) (with effect in accordance with Sch. 32 para. 3 of the amending Act) by Finance Act 2003 (c. 14), Sch. 32 para. 2(1)(b) (with Sch. 32 para. 4)