TTM09330 - Capital allowances: Exit from tonnage tax (P&M)
Qualifying expenditure: Long-life assets
Long-life assets are those which may reasonably be expected to have a useful economic life of at least 25 years when new. Ships were excluded from the long-life asset legislation until 31 December 2010.
Expenditure on long-life assets is written down in the special rate pool. See CA23700 onwards. From 1 April 2018 the rate is 6 per cent on reducing balance basis.
The qualifying expenditure that should go into a company’s special rate pool in respect of long-life items of machinery or plant is a percentage of the original cost of the asset.
The percentage varies according to length of time that the company owned the asset before leaving the tonnage tax regime, as follows:
Length of period of ownership to date of exit | Percentage of original cost to go into capital allowance pool |
---|---|
Less than or equal to 1 year | 94 |
From 1 year and one day to 2 years | 88 |
From 2 years and one day to 3 years | 83 |
From 3 years and one day to 4 years | 78 |
From 4 years and one day to 5 years | 73 |
From 5 years and one day to 6 years | 69 |
From 6 years and one day to 7 years | 65 |
From 7 years and one day to 8 years | 61 |
From 8 years and one day to 9 years | 57 |
From 9 years and one day to 10 years | 54 |
From 10 years and one day to 11 years | 51 |
From 11 years and one day to 13 years | 47 |
From 13 years and one day to 16 years | 40 |
From 16 years and one day to 19 years | 33 |
From 19 years and one day to 22 years | 27 |
From 22 years and one day to 25 years | 23 |
From 25 years and one day to 30 years | 18 |
From 30 years and one day to 35 years | 13 |
From 35 years and one day to 40 years | 10 |
From 40 years and one day to 45 years | 7 |
From 45 years and one day to 50 years | 5 |
From 50 years and one day to 60 years | 3 |
From 60 years and one day to 70 years | 2 |
More than 70 years | Nil |
References
Reference | Link |
---|---|
FA00/SCH22/PARA85 (exit: plant & machinery) | TTM17466 |
SI00/2303/REG6 (writing-down basis of long-life assets) | TTM18006 |
Qualifying expenditure on exit from tonnage tax | TTM09300 |