TTM02200 | Tonnage tax elections: When election takes effect?

General rule

The general rule is that an election first applies from the beginning of the accounting period in which it is made. This rule has effect for companies that previously qualified and are electing into tonnage tax during a further window of opportunity. It does not apply to companies that first become qualifying for tonnage tax.

FA00/SCH22/PARA12 provides for an election to take effect from the beginning of certain other accounting periods. Where this is subject to the agreement of HMRC, the election should explain why one of these alternative start dates is required. For instance, the group might be carrying out a reorganisation to prepare for tonnage tax, and would not wish the election to take effect until after this reorganisation was complete.

Exceptions

There are a number of exceptions to the general rule:

• See TTM02210 for backdating the date of entry.

• See TTM02220 for deferring the date of entry for one AP.

• See TTM02230 for deferring the date of entry for two APs.

• See TTM02260 for elections after the initial period.

• See TTM12310 and TTM12320for deemed elections after a merger.

• See TTM12320 and TTM12340for actual elections after a merger.