Amalgamation and Demerger of shipping companies - Section 115VY & Section 115VZ

Tonnage tax option: amalgamated or resulting companies inherit or must exercise the unexpired option if qualifying.

On amalgamation, the tonnage tax scheme applies to the amalgamated entity if it is a qualifying company; such an amalgamated company not previously under tonnage tax must exercise the option within three months of scheme approval, while amalgamations of tonnage tax companies carry forward the longest unexpired option period. If a company was qualifying on the reference date but did not exercise the initial option, the Chapter does not apply and income from qualifying ships is computed under the general income tax provisions. On demerger, the tonnage tax scheme may apply to the resulting company for the unexpired option period, and the demerged company's option remains for its unexpired period if it stays qualifying.