TTM10500 | Ship leasing: Quantitative restrictions on allowances

Restrictions cease to apply: Introduction

The restrictions on capital allowances available to lessors of ships only apply where the ship is a qualifying ship provided for use by a tonnage tax company.

If this ceases to be the case, perhaps because the lessee’s tonnage tax election expires, or because the ship is converted to non-qualifying use, then the restrictions cease to apply.

Expenditure on the ship in question should be moved from the lessor’s 18% and 6% tonnage tax pools and moved back into the normal capital allowances pool.

See TTM10510 for details of how the reallocation of expenditure is to be done.

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