Explanatory note

These Regulations amend Schedule 22 to the Finance Act 2000 (tonnage tax) and section 56(3)(za) of the Income Tax Act 2007 (personal reliefs: residence of claimants) to maintain the effect of these provisions after the withdrawal of the United Kingdom from the European Union.

The amendments to Schedule 22 to the Finance Act 2000 maintain the effect of the tonnage tax regime by ensuring that the legislation continues to apply to the shipping registers currently within the scope of the regime on the withdrawal of the United Kingdom from the European Union. The amendments ensure that the tonnage tax regime will continue to apply to qualifying ships registered in the United Kingdom, Gibraltar and European Union member States after IP completion day. It also maintains the existing effect of paragraph 49 of Schedule 22 to the Finance Act 2000 with regards to the treatment of dividends or other distributions of overseas companies over which more than 50% of the voting power is held by companies resident in the UK, Gibraltar or a member State.

The amendment to section 56(3)(za) of the Income Tax Act 2007 maintains the effect of income tax legislation relating to the personal allowance, blind person’s allowance, marriage allowance and married couple’s allowance on withdrawal of the United Kingdom from the European Union (and accordingly, on the United Kingdom ceasing to be a member of the European Economic Area).

A Tax Information and Impact Note has not been prepared for this Instrument as it contains no substantive changes to tax policy.