TTM17246 - Schedule 22 Finance Act 2000: Other Requirements

The requirement not to enter into tax avoidanceFA00/SCH22/PARA41

(1) It is a condition of remaining within tonnage tax that a company is not a party to any transaction or arrangement that is an abuse of the tonnage tax regime.

(2) A transaction or arrangement is such an abuse if in consequence of its being, or having been, entered into the provisions of this Schedule fall to be applied in a way that results (or would but for this paragraph result) in-

(a) a tax advantage being obtained for-

(i) a company other than a tonnage tax company, or

(ii) a tonnage tax company in respect of its non-tonnage tax activities,

or

(b) the amount of the tonnage tax profits of a tonnage tax company being artificially reduced.

(3) In this paragraph "tax advantage" has the same meaning as in Chapter I of Part XVII of the Taxes Act 1988 (tax avoidance) (see section 709 of that Act).

(4) A lease is not to be taken as being an abuse of the tonnage tax regime by reason of the lessor obtaining capital allowances as a result of the lease being, or having been, entered into. In this sub-paragraph "lease", and "lessor" in relation to a lease, have the meaning given by para 89(2)

History

Amended by Schedule 2 CAA 2001. Up to 31^s t March 2001 subparagraph 4 read:

(4) A finance lease is not to be taken as being an abuse of the tonnage tax regime by reason of the lessor obtaining capital allowances as a result of the lease being, or having been, entered into.

In this sub-paragraph "finance lease", and "lessor" in relation to such a lease, have the meaning given by section 82A of the Capital Allowances Act 1990.

Further amended by FA 2003 with effect for any lease entered into after 18 December 2002. Upto that data subparagraph4 read:

4) A finance lease is not to be taken as being an abuse of the tonnage tax regime by reason of the lessor obtaining capital allowances as a result of the lease being, or having been, entered into. In this sub-paragraph "finance lease", and "lessor" in relation to such a lease, have the meaning given by section 219 of the Capital Allowances Act 2001

References