TTM10420 - Ship Leasing: Quantitative restrictions on allowances

Shared expenditure

If two or more persons share the cost of providing a ship that is subject to the restrictions on capital allowances described in TTM10400, then the restrictions areapplied proportionately to each of those persons’ shares in the total cost.

Example

A Ltd and B Ltd are two lessors who take an equal share in providing a qualifying ship costing £90 million to a tonnage tax company under a lease

A Ltd and B Ltd will each be entitled to:

• writing down allowances of 25% a year on the first £20 million of their expenditure, and
• writing down allowances of 10% a year on the next £20 million of their expenditure, but
• no allowances in respect of the remaining £5 million of their expenditure.

References