Commentary

D7.1004 Qualifying conditions—qualifying ships

Corporate tax
Corporate tax | Commentary

D7.1004 Qualifying conditions—qualifying ships

Corporate tax | Commentary

D7.1004 Qualifying conditions—qualifying ships

General

A qualifying ship is a seagoing ship of 100 tons or more gross tonnage used for:

  1.  

    (a)     the carriage by sea of passengers or cargo

  2.  

    (b)     towage, salvage or other marine assistance carried out at sea; or

  3.  

    (c)     transport by sea in connection with other services of a kind necessarily provided at sea. This would include, for example, services such as cable laying, weather ships etc. HMRC accept (in a published change of view issued on 21 July 2009) that the profits from a ship arising from both transportation and services will fall within the tonnage tax ring-fence. Previously they took the view that the provision of other services would fall outside tonnage tax, and be computed and assessed under the normal corporation tax rules. They have confirmed that they will settle any open case involving specialist ships on this revised basis and will approach any amended returns for in-date years on the same basis1 (see D7.1014)

A vessel is not a qualifying ship if the main purpose for which it is used is the provision of goods or services of a kind normally provided on land2.

Seagoing

A 'seagoing' ship is defined as a ship which is 'certified for navigation at sea by the competent authority of any country or territory'3. 'Sea' does not include a port, harbour, estuary, a tidal or other river or an inland waterway4. HMRC consider that a ship which is only certified to travel in waters classified by the Marine Coastguard

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