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.


FA00/SCH22/PARA94 (quantitative restrictions on allowances)


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


Quantitative restrictions on allowances


Shared expenditure on ship


Cost of providing ship


Example of cost of providing ship and the quantitative restrictions