TTM02260 | Tonnage tax elections: When election takes effect

Election made outside a window of opportunity.

The flexibility on starting date given to elections made in a further window of opportunity is not appropriate for elections made outside this window, and the election has effect from the day the company or group first qualified. See FA00/SCH22/PARA12 (6).

The company’s entry into tonnage tax will trigger an end to the final pre-tonnage tax accounting period, and a new accounting period will therefore begin on the date of entry (if that date would not otherwise be the start of an accounting period). See TTM07010.

Deferral possible where 75% limit exceeded in first AP

However, FA00/SCH22/PARA38 (2) allows for deferral where the 75% limit has been exceeded in the first, or first and second, accounting periods after first qualifying. See TTM02410.