TTM10430 - Ship leasing: Quantitative restrictions on allowances
Cost of providing the ship
Meaning
For the purpose of applying the quantitative restrictions (as described in TTM10400 onwards) the ‘cost of providing the ship’ means the total cost of providing the vessel in a state ready to be brought into use for the purposes for which it is normally to be used.
This includes the cost of any accessories or additional equipment, or fitting out, necessary for the operation of the ship for those purposes. For some specialist vessels these costs may be quite considerable.
The amounts to be taken into account in determining the total cost are limited to the amounts that would otherwise have been qualifying expenditure for the purposes of capital allowances.
New expenditure
Further capital expenditure by a lessor on a ship is added to the original cost of providing the ship in order to determine:
- whether the lessor is entitled to capital allowances in respect of the further expenditure, and
- if this is the case, the rate of writing-down allowances to which the lessor is entitled.
References
FA00/SCH22/PARA96 (cost of providing ship) | TTM17556 |
Example of cost of providing ship and the quantitative restrictions | TTM10440 |