Finance Act 1986

Balancing charges: old allowances to be brought into account

8 (1) In any case where—

(a) by virtue of any of the preceding provisions of this Schedule, the whole or any part of the outstanding balance of an item of old expenditure is treated for the purposes of Schedule 13 to this Act as qualifying expenditure, and

(b) a balancing charge falls to be made under paragraph 11 of that Schedule in respect of that expenditure,

then, in determining the amount on which that charge falls to be made, sub-paragraph (2)(b) of the said paragraph 11 shall have effect as if it referred not only to allowances made as mentioned in sub-paragraph (1)(c) of that paragraph but also, subject to sub-paragraph (2) below, to allowances made in respect of the item of old expenditure under the old code of allowances.

(2) Where the qualifying expenditure in respect of which a balancing charge falls to be made represents part only of the outstanding balance of an item of old expenditure, the reference in sub-paragraph (1) above to allowances made in respect of that item shall be construed as a reference to such part of those allowances as it is just and reasonable to apportion to that part of the balance (having regard to the apportionment of the balance under paragraph 3(2) above).