TTM03590 | Qualifying companies and ships: When does a ship cease to be qualifying?

Ship ceases to qualify

A ship will cease to be qualifying when it:

• is lost at sea;

• is considered a constructive total loss;

• ceases to be certified for navigation at sea; therefore no longer seagoing;

• begins to be used for the provision or goods or services normally provided on land (TTM03610); or

• becomes an excluded type of vessel (TTM03620).

Ship does not cease to qualify

A qualifying ship remains qualifying through most stages of its working life. Thus, it continues to be used for a qualifying purpose when:

• in ballast,

• laid up awaiting a charter,

• in dry-dock undergoing a refit, or

• being repaired.

A ship that is laid up for a long period because of industry conditions or world markets will remain a qualifying ship and the tonnage tax regime will continue to apply to it provided:

• it remains certified for navigation at sea;

• the training commitment is maintained; and

• it does not otherwise become a non-qualifying ship.

See also TTM03700 on change of use and TTM03710 on temporary change of use.