TTM14210 - Exiting tonnage tax: Effects of exiting tonnage tax regime

Exit charge: Chargeable gains

Chargeable gains on tonnage tax assets made during the six years immediately preceding the day on which the company ceased to be a tonnage tax company are recomputed on the basis that the company had never been a tonnage tax company.

Only gains, not losses, are recomputed.  Where this results in an increase in the amount of any chargeable gain, the increase should be assessed as arising immediately before the company ceased to be a tonnage tax company (FA00/SCH22/PARA138); that is, the final tonnage tax accounting period.

No relief, deduction or set-off of any description (including chargeable gains losses) is allowed against the increase or the Corporation Tax on that amount (PARA138 (4)).

References

FA00/SCH22/PARA138 (exit charge: chargeable gains) TTM17766
Exit charge: General TTM14200