49(1)Income of a tonnage tax company consisting in a dividend or other distribution of an overseas company is relevant shipping income if the following conditions are met.U.K.
(2)The conditions are—
(a)that the overseas company operates qualifying ships;
(b)that more than 50% of the voting power in the overseas company is held by a company resident in a [F1the United Kingdom F2...], or that two or more companies each of which is resident in a [F1the United Kingdom F2...] hold in aggregate more than 50% of that voting power;
(c)that [F3, where the overseas company operates qualifying ships,] the 75% limit is not exceeded in relation to the overseas company in any accounting period in respect of which the distribution is paid;
(d)that all the income of the overseas company is such that, if it were a tonnage tax company, it would be relevant shipping income;
(e)that the distribution is paid entirely out of profits arising at a time when—
(i)the conditions in paragraphs (a) to (d) were met, and
(ii)the tonnage tax company was subject to tonnage tax; and
(f)the profits of the overseas company out of which the distribution is paid are subject to a tax on profits (in the country of residence of the company or elsewhere, or partly in that country and partly elsewhere).
(3)For the purposes of sub-paragraph (2)(c) the “75% limit” is the requirement set out in paragraph 37 (requirement that not more than 75% of tonnage is chartered in) as it applies to a single company.
(4)In this paragraph an “overseas company” means a company that is not resident in the United Kingdom.
Textual Amendments
F1Words in Sch. 22 para. 49(2)(b) substituted (31.12.2020) by The Taxes (Amendments) (EU Exit) Regulations 2020 (S.I. 2020/332), regs. 1, 2(7)
F2Words in Sch. 22 para. 49(2)(b) omitted (1.4.2022 for accounting periods beginning on or after that date) by virtue of Finance Act 2022 (c. 3), s. 25(9)(12)
F3Words in Sch. 22 para. 49(2)(c) inserted (with effect in accordance with Sch. 8 para. 8 of the amending Act) by Finance Act 2024 (c. 3), Sch. 8 para. 7(2)