Taxes Consolidation Act 1997 Schedule 18B paragraph 20

Industrial buildings

Paragraph 20 sets out how industrial building allowances and balancing charges are handled when a building is used for, or affected by, a company's tonnage tax trade.

• Any part of a building used for a tonnage tax trade is excluded from industrial building allowance treatment for the duration of the tonnage tax period.
• Where an industrial building acquired before entry to tonnage tax triggers a balancing charge during the tonnage tax period, the disposal proceeds are capped at the market value when the company entered tonnage tax, and the charge may be reduced under the paragraph 16 or 17 relief rules.
• When a tonnage tax company disposes of its interest in an industrial building, the buyer's residue of expenditure is calculated as if the company had never been subject to tonnage tax and all allowances and charges had been given in the normal way.
• When a company leaves tonnage tax, its entitlement to industrial building allowances is recalculated as if it had never been subject to tonnage tax, effectively unfreezing allowances that were suspended on entry.