TTM05230 | The 75% limit on charters-in: How to calculate

Example 2: Possible exclusion of group for exceeding limit

A group elects into tonnage tax with effect from 1 January 2001. The group consists of two companies:

• company C has an accounting date of 31 December, and

• company D has an accounting date of 30 September.

If the 75% limit is exceeded in two or more accounting periods the group may be excluded from tonnage tax.

The test applies to the accounting periods of company C and company D. So that:

• If the limit is exceeded in the two-year period ended 30 September 2005, the group may be excluded with effect from 1 October 2005;

• If the limit is exceeded in the two-year period ended 31 December 2005, the group may be excluded with effect from 1 January 2006.

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