TTM13015 - Corporate partnerships: Outline

Companies that are members of a partnership may bring qualifying activities carried on through that partnership into tonnage tax, even if some or all other partners are outside the regime.  The detailed rules are contained in FA00/SCH22/PARA130 to PARA136 and in SI00/2303/REG8 onwards.

These rules cover, amongst other things:

i)  the computation of tonnage tax and non-tonnage tax profits,

ii)  the application of the 75% chartering in limit,

iii)  the computation of chargeable gains, and

iv)  the calculation of capital allowances following a partner’s exit from tonnage tax,

and will apply equally to those partnerships, for example partnerships in Scotland, that are considered to have legal personality, as they do to other partnerships.

Broadly speaking, the effect of these provisions will enable a partner which is a tonnage tax company to calculate its share of partnership profit applying the tonnage tax regime.  Partners not within tonnage tax will calculate their share of partnership profit by reference to normal UK Corporation Tax principles.  Thus, there may be different parallel computations of the profits of one partnership, one on tonnage tax lines and one on normal Corporation Tax lines. The Tonnage Tax Technical Adviser will advise on points of concern or difficulty.

References

Outline of tonnage tax rules for partnerships

TTM13001

FA00/SCH22/PARA131 to PARA136 (application of provision to partnerships)

SI00/2303/REG8 to REG13 (application of provision to partnerships)