»Ê¹ÚÌåÓýapp

Entitlement to allowances

For expenditure incurred on or after 1 April 2024, a lessor will be able to claim writing down allowances (WDA) at the applicable rate (most likely to be 6% as in most cases ships would be assessed as long life assets acquired with special rate expenditure, see CAA01/S104A (1)(c) and S104D (1)), on the first £100 million of expenditure, and at 6% on the second £100 million, see FA00/SCH22/PARA94 (3)(b), which also applies the CAA01/S104D (1) rate.

Between 1 January 2011 and 31 March 2024 writing down allowances were available on the first £40 million, and the second £40m at the applicable rates.

»Ê¹ÚÌåÓýapp applicable rate for a ship that is not a long life asset is as follows:

• No first year allowances;
• Writing-down allowance of 18% a year on the first £100 million (the normal rate specified at CAA01/S56 (1), see FAA00/SCH22/PARA94 (3A)(a));
• Writing-down allowance of 6% a year (the rate specified by CAA01/S104D) on the next £100 million;
• No allowances on any excess over £200 million.

»Ê¹ÚÌåÓýappse limits apply separately to each ship, FA00/SCH22/PARA95 (1).

Historic rates were as follows:

Expenditure incurred	Writing-down allowance on first £40m	Writing-down allowance on next £40m	Writing-down allowance on any excess over £80m
Before 1 April 2012	Nil	Nil	Nil
1 April 2012 to 31 March 2019Ìý	18%	8%	8%
From 1 April 2019 to 31 March 2024	18%	6%	6%

Ìý

Hybrid rate

WhereÌýa business's chargeable period spans the date the WDA rate is changed, a hybrid rate is used to calculate the rate of WDA for that transitional period - see CA23220 for more details on how to calculate the WDA rates for such periods.

Separate class pools

»Ê¹ÚÌåÓýapp expenditure that does qualify for allowances should be taken to separate 18% and 6% class pools.Ìý Expenditure on each qualifying ship should be allocated to the 18% class pool or the 6% class pool as appropriate.

References

FA00/SCH22/PARA94 (quantitative restrictions on allowances)	TTM17546
FA00/SCH22/PARA95 (1) (limits apply to cost of each ship)	TTM17551
Quantitative restrictions on allowances	TTM10400
Shared expenditure on ship	TTM10420
Cost of providing ship	TTM10430
Example of cost of providing ship and the quantitative restrictions	TTM10440