TTM11100 | Offshore activities: Different types of vessels and their treatment

Vessels that are engaged in offshore activities are treated in three different ways by the legislation:

• Vessels to which the special rules apply

The special rules only apply when they are engaged in offshore activities; when they are engaged elsewhere they come within the normal tonnage tax regime. See TTM11110.

• Vessels to which the special rules do not apply

Vessels which come within the normal tonnage tax regime wherever they operate. See TTM11120.

• Vessels outside tonnage tax

Vessels which are excluded from the tonnage tax regime wherever they operate. See TTM11130.

Remember that the ‘normal’ tonnage tax regime can only apply to shipping profits. Many vessels which engage in offshore activities will be qualifying ships by virtue of FA00/SCH22/PARA19 (1)(d) as ships that provide ‘transport in connection with other services of a kind necessarily provided at sea’.

Small vessels

Vessels which are not seagoing, or which are less than 100 gross tons, cannot be qualifying ships, TTM03500. All such vessels will come within the normal Corporation Tax regime wherever they operate.

References