Corporation Tax Act 2010 section 394ZA

Company joining tonnage tax group

Section 394ZA identifies when a relevant change occurs in the relationship between a lessor company and its principal company as a result of joining a tonnage tax group.

• A relevant change arises when a lessor company (A) joins a tonnage tax group but does not itself enter the tonnage tax regime on that day.
• A relevant change also arises on the day before A joins a tonnage tax group, if A both joins the group and enters tonnage tax on the following day.
• The tonnage tax group and tonnage tax regime are governed by Schedule 22 to the Finance Act 2000.
• The timing distinction matters because it determines the precise day on which the relevant change is treated as occurring for the purposes of the long funding lease rules.