697H Relevant shipping income: distributions of overseas shipping companies.
(1) The conditions referred to in paragraph (k) of the definition of “relevant shipping income” in section 697A are—
(a) that the overseas company operates qualifying ships;
(b) that more than 50 per cent of the voting power in the overseas company is held by a company resident in a Member State, or that 2 or more companies each of which is resident in a Member State hold in aggregate more than 50 per cent of that voting power;
(c) that the 75 per cent limit is not exceeded in relation to the overseas company in any accounting period in respect of which the distribution is paid;
(d) that all the income of the overseas company is such that, if it were a tonnage tax company, it would be relevant shipping income;
(e) that the distribution is paid entirely out of profits arising at a time when—
(i) the conditions in paragraphs (a) to (d) were met, and
(ii) the tonnage tax company was subject to tonnage tax;
(f) the profits of the overseas company out of which the distribution is paid are subject to a tax on profits (in the country of residence of the company or elsewhere, or partly in that country and partly elsewhere).
(2) A dividend or other distribution of an overseas company which is made out of profits which are referable to a dividend or other distribution in relation to which the conditions of subsection (1) are met shall be deemed for the purposes of this Part to be a dividend or other distribution in respect of which the conditions in subsection (1) are met.
(3)Section 440 shall not apply to dividends and other distributions of an overseas company which is relevant shipping income of a tonnage tax company.