Section 697Q Ten year disqualification from re-entry into tonnage tax

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Amendments

Section 697Q inserted by Finance Act 2002 section 53(1) from 28 March 2003.

(1) This section shall apply in every case where a company ceases to be a tonnage tax company otherwise than on the expiry of a tonnage tax election.

When do the disqualification from re-entry rules apply?

(1) These rules apply where your company is ejected from the tonnage tax system.

(2) Where this section applies―

(a) a company election made by a former tonnage tax company shall be ineffective if made before the end of the period of 10 years beginning with the date on which the company ceased to be a tonnage tax company, and

(b) a group election that―

(i) is made in respect of a group whose members include a former tonnage tax company, and

(ii) would result in that company becoming a tonnage tax company,

shall be ineffective if made before the end of the period of 10 years beginning with the date on which that company ceased to be a tonnage tax company.

How long must I wait to elect back into the tonnage tax regime after leaving it?

(2) As a former tonnage tax company or group member (see (4)), you may not elect back into the tonnage tax regime until 10 years have expired from the date you ceased to be a tonnage tax company.

(3) This section shall not prevent a company becoming a tonnage tax company under and in accordance with the rules in Part 4 of Schedule 18B.

Does the disqualification rule apply where I come into the tonnage tax regime due to a merger or takeover?

(3) The exclusion in (2) does not prevent you coming into the tonnage tax regime as a result of a merger or takeover (Schedule 18B Part 4).

(4) In this section "former tonnage tax company" means a company that is not a tonnage tax company but has previously been a tonnage tax company.

What is meant by a "former tonnage tax company"?

(4) A former tonnage tax company is a company that was previously, but is no longer, a tonnage tax company.