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FA00/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 given by Section 840ZA 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)

References

Abuse of Tonnage Tax regime	TTM05501
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