TTM14110 - Exiting tonnage tax: Effects of exiting tonnage tax regime
Ten year disqualification
No re-entry into tonnage tax for ten years
For all cases, except on expiry of an election, there is a ten year disqualification from re-entry into tonnage tax under FA00/SCH22/PARA137 (3). The ten years will run from the first day after leaving tonnage tax. If a further window of opportunity were offered for entry into the regime, a company could still not re-enter if any part of its first accounting period following re-entry into tonnage tax would fall within the ten year disqualification period.
Exception to ten year disqualification rule
The only exception to this rule is where, under the merger rules, either:
- an ex-tonnage tax group or company were taken over by a tonnage tax group or company which was the ‘dominant party’ or, there being no dominant party, which could elect to be so (FA00/SCH22/PARA123), or
- an ex-tonnage tax group or company were taken over by a non-qualifying group or company which was the ‘dominant party’ (PARA125).
In those limited circumstances an ex-tonnage tax company can re-enter tonnage tax before the expiry of its ten year disqualification period.
The ten year disqualificationv period does not apply to a company which remains in a group which continues to be a tonnage tax group because at least one other company in the group is a tonnage tax company, see TTM14030.
References
| FA00/SCH22/PARA140 (ten year disqualification from re-entry) | TTM17776 |
| FA00/SCH22/PARA137 (company ceases to be tonnage tax company) | TTM17761 |
| FA00/SCH22/PARA123 (merger between T and QNT) | TTM17691 |
| FA00/SCH22/PARA125 (merger between NQ and QNT) | TTM17701 |
| Merger between T and QNT | TTM12320 |
| Merger between NQ and QNT | TTM12340 |