Capital Allowances / Tonnage Tax / Statutory Interpretation

Francis Fitzpatrick 11 New Square

Victory for the taxpayer in the appeal to the Upper Tribunal (Tax and Chancery Chamber) in Unicorn Tankships v HMRC [2021] UT/2020/0028 before the FTT where Francis Fitzpatrick QC acted for the taxpayer.

This is the first case to consider the relationship between the shipping tonnage tax regime and the capital allowances regime and whether a balancing charge arises where a company leaves the regime. The case is also useful authority for the proper approach to statutory interpretation of a ring-fenced regime. In a lengthy and careful decision, the UTT held that no balancing charge arose.