Your World of Legal Intelligence
 United Kingdom | +44 (0) 20 7284 8080

Chapter TTM07450

Document Cited in Related
Vincent
Published date19 March 2016
Record NumberTTM07450
CourtHM Revenue & Customs
Computational principles

The calculation of the excess finance costs for an accounting period will involve the following stages:

i) Determine the total UK-deductible finance costs of the tonnage tax group that are taken into account in computing profits arising outside the ring-fence (after any statutory disallowances including transfer-pricing adjustments). Intra-group finance costs with a corresponding direct receipt chargeable to UK corporation tax (outside the ring fence) in the same accounting period elsewhere in the group do not need to be counted for this purpose.

ii) Determine the total UK-deductible finance costs of the tonnage tax group, as if there were no tonnage tax election in place. This could be approximated by the amount determined in (i) above, plus finance costs charged in the calculation of relevant shipping profits. Intra-group finance costs with a corresponding contemporaneous UK taxable receipt that were not counted under (i) above should again be ignored here.

iii) Determine the proportionate amount of the costs calculated in (ii) that cannot be regarded as being incurred so as to give rise, directly or indirectly, to relevant shipping profits. This should be done on a just and reasonable basis having regard to the underlying funding and the generation of relevant shipping profits. Further guidance is...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT