Depreciation - Section 115VK

Tonnage tax depreciation: apportion block WDV between qualifying and other assets with pro rata transfers on use changes.

Depreciation for the first previous year under the tonnage tax regime requires apportioning the block WDV of ships into a block of qualifying assets and a block of other assets based on their book WDVs as shown on the last day of the preceding previous year, ignoring post assent revaluations. Assets moving between blocks transfer an appropriate portion of their book WDV proportionate to the block totals on the first day of the previous year, and depreciation for partly used assets is allocated pro rata by days. The qualifying block is treated as a separate block and depreciation is allowed as if the apportioned WDV had been brought forward.