CA25300 - PMA: Ships: Deferment of balancing charges: outline
When a ship is bought the capital allowances on it are calculated separately. The expenditure on the ship is put into a separate pool (the single ship pool) CA25150. A disposal event for the ship does not give rise to a balancing charge in the single ship pool for that ship but it may give rise to a balancing charge in the main pool CA25250.
The ship owner can opt out of single ship pool treatment for any
ship and transfer all or part of the expenditure in its single ship
pool. The expenditure is then transferred to the pool in which the
expenditure would have been had the single ship pool treatment not
been available CA25150. In that case if there is a disposal event
all or part of the disposal proceeds are deducted from that pool in
the normal way and there may or may not be a balancing charge in
that pool.
If there is a balancing charge following the disposal of a
ship and the ship is a qualifying ship
CA25350 the ship owner can make a claim
to defer it. When a claim is made the shipowner attributes the part
of the balancing charge attributable to the disposal of the ship to
expenditure on new shipping incurred within six years of the date
of the disposal. When attribution is made the balancing charge is
brought to account as a disposal value in the single ship pool for
the new ship. The deferment of balancing charges is sometimes
called
rollover. A balancing charge arising to a company
which is a member of a group can be rolled over into the cost of
new shipping acquired by other members of the same group provided
that:
- the ship against which the balancing charge is rolled over remains in the ownership of the company which acquired it, and
- that company remains a member of the same group as the company on which the balancing charge arose for the next three years or until the total loss of or irreparable damage to the ship if sooner.
