Revenue Note for Guidance
(1)&(2) The tonnage tax activities of a tonnage tax company are to be treated as a separate trade of the company distinct from all other activities of the company. This effectively establishes a ring fence around the tonnage tax activities of the company for tax purposes. The separate trade created by this provision is subject to special provisions for the purposes of the tonnage tax regime. The ring fence ensures that the benefits of the regime only apply to qualifying activities and ensures that the normal corporation tax rules apply to activities outside the ring fence even if carried on by the same company.
(3) As respects any activities treated as a separate trade of a company, the company is required to comply with all relevant requirements as to the computation of tax and the keeping of records in relation to these activities separate from any other activities carried on by the company.
Relevant Date: Finance Act 2021