Capital Allowances Act 2001

[F1 General U.K.

Textual Amendments

F1 Pt. 4 omitted (with effect in relation to chargeable periods beginning on or after 1.4.2011 for corporation tax purposes and 6.4.2011 for income tax purposes in accordance with ss. 84(1)(3)(4), 85 of the amending Act) by virtue of Finance Act 2008 (c. 9), s. 84(2) (with Sch. 27)

380 When balancing adjustments are made U.K.

(1) A balancing adjustment is made if—

(a) qualifying expenditure has been incurred, and

(b) a balancing event occurs in a chargeable period for which a person would (apart from this section) be entitled to a writing-down allowance.

(2) A balancing adjustment is either a balancing allowance or a balancing charge and is made for the chargeable period in which the balancing event occurs.

(3) A balancing allowance or balancing charge is made to or on the person entitled to the relevant interest in relation to the qualifying expenditure immediately before the balancing event.

381 Balancing events (on making an election) U.K.

(1) Any event described in subsection (2) is a balancing event, but only if an election is made in accordance with section 382 for it to be treated as such.

(2) The events are—

(a) the relevant interest is acquired as mentioned in section 375;

(b) the agricultural building is demolished or destroyed;

(c) the agricultural building ceases altogether to be used (without being demolished or destroyed).

382 Requirements as to elections U.K.

(1) An election relating to an event within section 381(2)(a) must be made jointly by the former owner and the new owner.

(2) No election relating to such an event may be made if it appears that the sole or main benefit which might have been expected to accrue to the parties, or any of them, from—

(a) the acquisition, or

(b) transactions of which the acquisition is one,

is the obtaining of an allowance, or a greater allowance, under this Part.

(3) In determining for the purposes of subsection (2) what benefit might have been expected to accrue, sections 568 and 573 (sales treated as being for alternative amount) are to be disregarded.

(4) An election relating to an event within section 381(2)(b) or (c) must be made by the person entitled to the relevant interest immediately before the event.

(5) No election relating to any event may be made if any person by whom the election is to be made is not within the charge to tax.

(6) The election must be made by notice given to the [F2 an officer of Revenue and Customs]—

(a) for income tax purposes, on or before the normal time limit for amending a tax return for the tax year in which the relevant chargeable period ends;

(b) for corporation tax purposes, no later than 2 years after the end of the relevant chargeable period.

(7) “The relevant chargeable period” means the chargeable period in which the event in question occurs.

Textual Amendments

F2 Words in Act substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 83(1); S.I. 2005/1126, art. 2(2)(h)

383 Proceeds from balancing events U.K.

(1) References in this Part to the proceeds from a balancing event are to the amounts received or receivable in connection with the event, as shown in the Table—

Table

Balancing events and proceeds

1. Balancing event	2. Proceeds from event
1. The sale of the relevant interest.	The net proceeds of the sale.
2. The acquisition of the relevant interest under section 368(3) (ending of lease where incoming lessee makes payment to outgoing lessee).	The net amount of the payment to the outgoing lessee.
3. The demolition or destruction of the agricultural building.	The net amount received for the remains of the building, together with— (a) any insurance money received in respect of the demolition or destruction, and (b) any other compensation of any description so received, so far as it consists of capital sums.
4. The agricultural building ceases altogether to be used.	Any compensation of any description received in respect of the event, so far as it consists of capital sums.

(2) The amounts referred to in column 2 of the Table are those received or receivable by the person whose entitlement to a balancing allowance or liability to a balancing charge is in question.

384 Exclusion of proportion of proceeds U.K.

(1) The amounts referred to in column 2 of the Table in section 383 do not include any amount which, on a just and reasonable apportionment, is attributable to assets representing expenditure in respect of which an allowance cannot be made under this Part.

(2) If the qualifying expenditure in respect of which the balancing adjustment is made was restricted as a result of—

(a) subsection (3) or (4) of section 369 (restrictions on expenditure on farmhouse), or

(b) subsection (5) of that section (restriction on expenditure on buildings to be used partly for purposes other than husbandry),

a corresponding proportion only of the amounts referred to in the Table in section 383 is to be treated as proceeds from the balancing event.

(3) Subsection (1) does not affect sections 562, 563 and 564(1) (apportionment and procedure for determining apportionment).]