TTM05230 - The 75% limit on charters-in: How to calculate

Example 2: Possible exclusion of group for exceeding limit

A group elects into tonnage tax with effect from 1 January 2001.  The group consists of two companies:

• company C has an accounting date of 31 December, and
• company D has an accounting date of 30 September.

If the 75% limit is exceeded in two or more accounting periods the group may be excluded from tonnage tax.

The test applies to the accounting periods of company C and company D. So that:

• If the limit is exceeded in the two-year period ended 30 September 2005, the group may be excluded with effect from 1 October 2005;
• If the limit is exceeded in the two-year period ended 31 December 2005, the group may be excluded with effect from 1 January 2006.

References

FA00/SCH22/PARA40 (1) (limit exceeded for two APs)	TTM17241
Accounting periods of group companies	TTM05210
Example 1: Deferment of election if test failed	TTM05220