TTM07000 - The Ring Fence
Introduction
This section explains why relevant income of a tonnage tax company is ring fenced and how legislation works to isolate these tonnage tax profits. This section covers the introduction of new accounting periods, the treatment of income from controlled foreign companies, and calculation of allowable finance costs. It also explains the rules that prevent deductions being made from tonnage tax profits.
Table of contents
Outline and basic concept
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Outline |
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Accounting periods |
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Tonnage tax trade |
Controlled foreign companies
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Outline of Tonnage Tax and CFCs |
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CFC is a qualifying overseas shipping company |
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CFC is not a qualifying overseas shipping company, but operates qualifying ships |
Reliefs and deductions
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No deduction from tonnage tax profits |
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Ring-fencing of tax liability |
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Pre-tonnage tax losses |
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Tonnage tax profits of CFC |
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ACT and shadow ACT |
Transfer pricing
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Outline of transfer pricing |
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Between companies |
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Within a company |
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Duty to notify connected parties |
Finance costs
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Outline of finance costs adjustment |
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Meaning of ‘finance costs’ |
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Singleton company |
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Group companies |
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Broad approach |
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Computational principles |
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Determining a just and reasonable fraction |
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Examples |
Interaction of finance costs and transfer pricing
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Interaction of finance costs and transfer pricing |
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Intragroup interest-free loans: Examples |
