TTM10410 - Ship Leasing: Quantitative restrictions on allowances

Entitlement to allowances

A lessor’s entitlement to capital allowances in respect of the cost of providing a ship to be used by a tonnage tax company is as follows:

  • No first year allowances
  • Writing-down allowance of 25% a year on the first £40 million
  • Writing-down allowance of 10% a year on the next £40 million
  • No allowances on any excess over £80 million

These limits apply separately to each ship, per paragraph 95(1).

Separate class pools

The expenditure that does qualify for allowances should be taken to separate 25% and 10% class pools. Expenditure on each qualifying ship should be allocated to the 25% class pool, or the 10% class pool, as appropriate.

References

FA00/SCH22/PARA94 (quantitative restrictions on allowances)

TTM17546

FA00/SCH22/PARA95(1) (limits apply to cost of each ship)

TTM17551

Quantitative restrictions on allowances

TTM10400

Shared expenditure on ship

TTM10420

Cost of providing ship

TTM10430

Example of cost of providing ship and the quantitative restrictions

TTM10440