TTM07240 | The ring fence: Reliefs and deductions

ACT and shadow ACT

As described in TTM07210, unrelieved surplus ACT may not be set of against tax chargeable which is attributable to a company’s tonnage tax profits (or which is attributable to the tonnage tax profits of a CFC which have been apportioned to a company under step 3 in TIOPA10/S371BC (1).

Conversely, per FA00/SCH22/PARA57 (5), a company's tonnage tax profits are to be left out of account in determining the company's profits charged to Corporation Tax for the purposes of the shadow ACT regulations (FA98/S32 and SI99/358).

But this does not affect the computation (under those regulations) of shadow ACT on distributions made by a tonnage tax company, whether paid out of tonnage tax profits or other profits.