Part 2Income tax, corporation tax and capital gains tax

Miscellaneous

57Tonnage tax: capital allowances in respect of ship leasing

(1)

Part 10 of Schedule 22 to FA 2000 (companies within tonnage tax: capital allowances in respect of ship leasing) is amended as follows.

(2)

In paragraph 94 (quantitative restrictions on allowances)—

(a)

in sub-paragraph (3)(a), for “a rate of 20% per annum” substitute “ the rate determined under sub-paragraph (3A) ”,

(b)

in sub-paragraph (3)(b), for “a rate of 10% per annum” substitute “ the rate specified in section 104D(1) of the Capital Allowances Act 2001 ”,

(c)

after sub-paragraph (3) insert—

“(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.”,

(d)

in sub-paragraph (4)—

(i)

omit the words “within each of those bands”,

(ii)

after “separate pools” insert “ in accordance with sub-paragraph (4A) ”, and

(iii)

omit the second sentence, and

(e)

after that sub-paragraph insert—

“(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”.”

(3)

In paragraph 95(4)—

(a)

for “(4)” substitute “ (4A) ”, and

(b)

for “20%” substitute “ tonnage tax (main rate) ” and for “10%” substitute “ tonnage tax (special rate) ”.

(4)

In paragraph 97—

(a)

in sub-paragraphs (2) and (3), for “20%” substitute “ tonnage tax (main rate) ” and for “10%” substitute “ tonnage tax (special rate) ”, and

(b)

in sub-paragraph (4), for “10%” substitute “ tonnage tax (special rate) ”.

(5)

In paragraph 98(8), for “20%” substitute “ tonnage tax (main rate) ” and for “10%” substitute “ tonnage tax (special rate) ”.

(6)

In paragraph 99 (quantitative restrictions: change of circumstances taking case out of restrictions)—

(a)

in sub-paragraph (2), for “20%” substitute “ tonnage tax (main rate) ” and for “10%” substitute “ tonnage tax (special rate) ”,

(b)

in sub-paragraph (4), for the words from “the whole of” to the end substitute “ the amount that the tax written down value of the ship would have been, at the time the change of circumstances occurs, had paragraph 94 never applied. ”, and

(c)

omit sub-paragraph (5).

(7)

In consequence of the amendments made by this section, omit section 80(5) to (7) of FA 2008.

(8)

The amendments made by this section have effect in relation to chargeable periods ending on or after 1 January 2011.

(9)

But the amendments made by this section are of no effect in relation to expenditure incurred before that date.