SCHEDULE 22 Tonnage tax
Part X The ring fence: capital allowances: ship leasing
Quantitative restrictions on allowances
94
(1)
Where the lessor under the F1... lease is entitled to capital allowances in respect of expenditure on the provision of the ship, the following provisions apply.
(2)
There is no entitlement to any F2annual investment allowance or first-year allowance.
(3)
The lessor is entitled—
(a)
in respect of the first £40 million of the cost of providing the ship, to writing-down allowances at F3the rate determined under sub-paragraph (3A) on the reducing balance, and
(b)
in respect of the next £40 million, to writing-down allowances at F4the rate specified in section 104D(1) of the Capital Allowances Act 2001 on the reducing balance.
F5(3A)
The rate mentioned in sub-paragraph (3)(a) is—
(a)
if the rate of the writing down allowance to which the lessor would be entitled in respect of the expenditure apart from this paragraph is that specified in section 56(1) of the Capital Allowances Act 2001, that rate, and
(b)
otherwise, the rate specified in section 104D(1) of that Act.
(4)
F10(4A)
The expenditure is to be allocated to the following pools—
(a)
to the extent that it is expenditure in respect of which the lessor is entitled to writing down allowance at the rate specified in section 56(1) of the Capital Allowances Act 2001, a pool to be known as “the tonnage tax (main rate) pool”, and
(b)
to the extent that it is expenditure in respect of which the lessor is entitled to writing down allowance at the rate specified in section 104D(1) of that Act, a pool to be known as “the tonnage tax (special rate) pool”.
(5)
If the cost of providing the ship exceeds £80 million, the lessor is not entitled to capital allowances in respect of the excess.