Yn ddilys o 10/07/2003
1(1)In Schedule 22 to the Finance Act 2000 (c. 17) (tonnage tax), Part 10 (the ring fence: capital allowances: ship leasing) is amended as follows.U.K.
(2)Omit the word “finance” from the expression “finance lease” in paragraphs 89(1), 90(1), 92(1), 93(1), 94(1), 98(1)(a) and 99(1)(a).
(3)At the end of sub-paragraph (1) of paragraph 89 (introduction to Part 10) insert—
“ This is subject to paragraph 89A (exception for ordinary charters). ”.
(4)For sub-paragraph (2) of that paragraph substitute—
“(2)In this Part of this Schedule “lease” means any arrangements that provide for a ship to be leased or otherwise made available by a person (“the lessor”) to another person (“the lessee”).”.
(5)After that paragraph insert—
“Quantitative restrictions not to apply to ordinary chartersU.K.
89A(1)Paragraphs 94 to 102, and paragraph 89(1) so far as relating to those paragraphs, do not apply in the following cases.
(2)The first case is where the ship is chartered out by a person who is responsible—
(a)for the operation of the ship, including the appointment of the master and those members of the crew engaged in navigation, throughout the period of the charter, and
(b)for defraying all expenses in connection with the ship throughout that period, or substantially all such expenses other than those directly incidental to a particular voyage or to the employment of the ship during that period.
For the purposes of this sub-paragraph a person is “responsible” if he is responsible as principal or if he appoints another person, other than the lessee or a person connected with the lessee, to be responsible in his place.
(3)The second case is where—
(a)the ship is chartered out by a person acting in the course of a trade that consists of, or to a significant extent includes, operating ships, and
(b)the conditions in sub-paragraph (4) are met.
(4)Those conditions are—
(a)that the period of the charter does not exceed seven years, and there is no provision or agreement under which it could be extended beyond seven years;
(b)that the period of the charter, together with any other periods in the same ten years during which the ship is chartered out to the lessee or a person connected with him, does not exceed seven years in total;
(c)that there are no arrangements under which the lessee or a person connected with him may acquire the ship, whether directly or indirectly, from the lessor.
In paragraph (b) “the same ten years” means any period of ten years that includes the period of the charter mentioned in that paragraph.
(5)References in this paragraph to the period of a charter are to the term specified in the lease or, if longer, the actual period during which the ship is chartered.
(6)Section 839 of the Taxes Act 1988 (connected persons) applies for the purposes of this paragraph.”.