TTM09210 - Capital Allowances: Balancing charges (P&M)
Reduction of balancing charges arising during Tonnage Tax
A company’s liability to balancing charges in respect of allowances is phased out over the first seven years following entry into the regime. Any balancing charge that may arise is reduced according to the number of whole years that the company has been in the Tonnage Tax regime. The reduction rises to 100% if the company has been in Tonnage Tax for 7 years or more.
This means that any disposal taking place after the company has been in the regime for 7 years or more will have no capital allowance consequences.
The following table gives the amount by which a balancing charge arising after entry is to be reduced:
|
Number of complete years since entry |
Percentage reduction |
|
1 |
15% |
|
2 |
30% |
|
3 |
45% |
|
4 |
60% |
|
5 |
75% |
|
6 |
90% |
|
7 or more |
100% |
References
|
FA00/SCH22/PARA78 (reduction of balancing charge) |
