SCHEDULES

SCHEDULE 22 Tonnage tax

Part VI Relevant shipping profits

Relevant shipping income: distributions of overseas shipping companies

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.

(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.