TTM12360 - Tonnage tax groups: Merger

Meaning of ‘relevant activities’

‘Relevant activities’ are defined by FA00/SCH22/PARA126 (3) according to the status of the merging groups or companies. The varying status is defined as follows:

T tonnage tax company or group;

QNT qualifying non-tonnage tax company or group; that is, a company or group that would have qualified for Tonnage Tax but is not covered by an election; and

NQ non-qualifying non-tonnage tax company or group; that is, a company or group that would not have qualified for making a tonnage tax election.

Merger between T and T, or T and QNT

For a merger between T and T or T and QNT the ‘relevant activities’ are the tonnage tax activities (T) or what would be tonnage tax activities (QNT) (PARA126(3)(a)).

Merger between NQ and QNT

For a merger between NQ and QNT the ‘relevant activities’ are all the activities of each party (PARA126 (3)(b)).

Measurement of ‘relevant activities’

You should seek to agree with the new group the basis on which and periods by reference to which the turnover from relevant activities is calculated. Where agreement cannot be reached you should decide and notify the group in writing of the decision (PARA126 (4) and (5)).

Appeal where disagreement

A company that disagrees with HMRC’s decision can appeal to have the decision reviewed internally, or appeal to have the decision heard by the First Tier Tribunal. The appeal should be made within 30 days of the decision being notified (PARA126 (5) and (6)). If the company seeks an internal review, and does not agree with the decision of that review, it can then appeal to the Upper Tribunal.

References

  • FA00/SCH22/PARA122 (merger between TT groups/companies) TTM17686
  • FA00/SCH22/PARA123 (merger between T and QNT) TTM17691
  • FA00/SCH22/PARA124 (merger between T and NQ) TTM17696
  • FA00/SCH22/PARA125 (merger between NQ and QNT) TTM17701
  • Merger between T and T TTM12310
  • Merger between T and NQT TTM12320
  • Merger between T and NQ TTM12330
  • Merger between NQ and QNT TTM12340
  • Definitions of T, NQT, NQ and QNT TTM12300