Part 9 Dredging allowances

Writing-down and balancing allowances

488 Balancing allowances

(1)

A person is entitled to a balancing allowance for a chargeable period if—

(a)

qualifying expenditure has been incurred on dredging,

(b)

in that chargeable period, the qualifying trade for the purposes of which the expenditure was incurred has been—

(i)

permanently discontinued, or

(ii)

sold,

(c)

the person is the last person carrying on the qualifying trade before its discontinuance or sale, and

(d)

the amount of the expenditure exceeds the amount of the allowances previously made in respect of it, whether to the same or different persons.

(2)

The amount of the balancing allowance is the amount of the difference.

(3)

For the purposes of subsection (1)—

(a)

the permanent discontinuance of a trade does not include an event treated as a permanent discontinuance under section 113(1) or 337(1) of ICTA (change in persons carrying on a trade etc. and effect of company ceasing to trade etc.), and

(b)

a sale does not include a sale which is within subsection (4) or (5).

(4)

A sale is within this subsection if any of the following conditions is met—

(a)

the buyer is a body of persons over whom the seller has control;

(b)

the seller is a body of persons over whom the buyer has control;

(c)

both the seller and the buyer are bodies of persons and another person has control over both of them;

(d)

the seller and the buyer are connected persons.

In this subsection “body of persons” includes a partnership.

(5)

A sale is within this subsection if it appears that the sole or main benefit which might be expected to accrue to the parties, or any of them, from—

(a)

the sale, or

(b)

transactions of which the sale is one,

is the obtaining of a tax advantage under any of the provisions of this Act apart from Part 2 (plant and machinery allowances).