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TTM14001 | Exiting tonnage tax: Types of exit

From HM Revenue & Customs · Tonnage Tax Manual

Voluntary exits

There are four possible reasons for voluntary exits from the tonnage tax regime:

  • Expiry of election (FA00/SCH22/PARA13 (1)), see TTM14010;

  • A withdrawal notice takes effect under FA00/SCH22/PARA15A, see TTM14080;

  • Ceasing to be a qualifying company or group (FA00/SCH22/PARA16), see TTM14020;

  • Operation of the merger provisions where no dominant party (FA00/SCH22/PARA123 (4)), see TTM14040.

Forced exits

There are three possible reasons for forced exits from the tonnage tax regime:

  • Operation of the merger provisions where the qualifying non-tonnage tax group or company (QNT) is dominant party (FA00/SCH22/PARA123 (3)), see TTM14050;

  • Exclusion for failing to meet 75% chartered in rule (FA00/SCH22/PARA39 and PARA40), see TTM14060;

  • Exclusion for tax avoidance (FA00/SCH22/PARA42), see TTM14070.

Exit charges

There is a specific exit charge under FA00/SCH22/PARA137 onwards only where the exit is for reasons relating wholly or mainly to tax, or there is expulsion for tax avoidance, see TTM14200.