SCHEDULES
SCHEDULE 22 Tonnage tax
Part V Other requirements
The requirement not to enter into tax avoidance arrangements
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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 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 M1Capital Allowances Act 1990.