Taxes Consolidation Act 1997 section 697L

Tonnage tax trade

Section 697L provides that the tonnage tax activities of a tonnage tax company are treated as a separate trade for corporation tax purposes, distinct from all other activities carried on by the company.

• Tonnage tax activities carried on as part of a trade are treated as a separate trade, distinct from all other activities of the company, for corporation tax purposes.
• A company's accounting period ends when it enters or leaves tonnage tax.
• The company must compute its tax and keep its records in respect of tonnage tax activities separately from any other activities it carries on.
• The ring fence ensures that tonnage tax benefits apply only to qualifying activities, while normal corporation tax rules apply to everything else.