TTM10420 | Ship leasing: Quantitative restrictions on allowances

Shared expenditure

If two or more persons share the cost of providing a ship that is subject to the restrictions on capital allowances described in TTM10400 the restrictions are applied proportionately to each of those persons’ shares in the total cost.

Example

A Ltd and B Ltd are two lessors who take an equal share in providing a qualifying ship costing £220 million to a tonnage tax company under a lease

A Ltd and B Ltd will be entitled to:

• writing down allowances of 18% a year on the first £50 million of their expenditure, and

• writing down allowances of 6% a year on the next £50 million of their expenditure, but

• no allowances in respect of the remaining £10 million of their expenditure,

where the limits are £100 million for a company not sharing expenditure.

References