TTM03170 - Qualifying Companies and ships: Ship chartered-out because of short-term over-capacity

A bareboat charter-out is allowed in the regime if

• the company has short-term surplus capacity (for instance through a temporary downturn in the market), and
• the ship is bareboat chartered-out for a period of no more than three years.

A company has to have operated the ship prior to it being bareboat chartered out.

Both legs of the test must be met. Evidence should be available to support there being genuine short-term over-capacity, and that the term of the charter does not exceed three years. Officers should consider requesting a copy of the charter, together with evidence to support the short-term over-capacity.

Any cases of difficulty, particularly when there are multiple charters exceeding three years, should be referred to the Tonnage Tax Technical Adviser.

References

FA00/SCH22/PARA18(5) (meaning of operating a ship)	TTM17096
Bareboat charters-out	TTM03150