Taxes Consolidation Act 1997 Schedule 18B paragraph 29

Demerger: group

Paragraph 29 of Schedule 18B deals with the continuation of tonnage tax status when a tonnage tax group splits into two or more groups following a demerger.

• Where a tonnage tax group splits into two or more groups, special rules apply to preserve tonnage tax status.
• Each new group that contains a company which was a tonnage tax company before the demerger is automatically treated as a tonnage tax group.
• A group election is deemed to have been made by each qualifying new group, without the need for a fresh application.
• The deemed election remains in force only until the date on which the original group election would have expired.