TTM12001 - Tonnage tax groups: Outline
Group for the purposes of tonnage tax has a wider meaning than for normal Corporation Tax purposes. This is in order to prevent a family grouping, or a group controlled overseas, from manipulating company ownership so as to pick and choose which companies to place inside and outside tonnage tax.
Group procedures
Although the UK system of corporate taxation is predicated upon an individual company making its own return, the tonnage tax regime provides, amongst other procedures, for a group focused:
- election into the tonnage tax regime,
- 75% limit (on chartering in), and
- finance cost adjustment.
To facilitate these there are a number of statutory provisions and administrative procedures for dealing with a tonnage tax group.
Companies entering and leaving group
Because an election into tonnage tax is for at least eight (originally ten) years, rules are needed to deal with situations where there are mergers between tonnage tax and non-tonnage tax companies and groups, and to help decide whether they should stay in or leave the regime.
References
FA00/SCH22/PARA116 onwards (groups, mergers and related matters) | TTM17656 |
Meaning of ‘group’ | TTM12010 |
Group arrangements | TTM12200 |
Mergers | TTM12300 |
Demergers | TTM12400 |