TTM17571 - Schedule 22 Finance Act 2000: Part X the ring fence - capital allowances - ship leasing - Para 99 quantitative restrictions - change of circumstances taking case out of restrictions

FA00/SCH22/PARA99

(1) The provisions of this paragraph apply where-

(a) the lessor under a lease has been entitled to capital allowances in circumstances in which paragraph 94 (quantitative restrictions on allowances) applied, and

(b) a change of circumstances takes the case out of paragraph 89(1) so that the restrictions in paragraph 94 no longer apply.

(2) When the change of circumstances occurs a disposal value shall be brought into account by the lessor equal to the tax written down value of the ship as at that time.

The provisions of paragraph 97 (treatment of disposal proceeds) apply as regards the allocation of that amount to the lessor’s tonnage tax (main rate) and tonnage tax (Special rate) pools.

(3) The lessor shall be treated as if he had incurred qualifying expenditure on the provision of the ship for the purposes of the lessee’s non-tonnage tax trade immediately after the change of circumstances occurs.

(4) The amount of that expenditure shall be taken to be the amount that the tax written down value of the ship would have been, at the time the change of circumstances occurs, had paragraph 94 never applied.

References

Restrictions cease to apply	TTM10500