Capital Allowances Act 2001 section 488

Balancing allowances

Section 488(1)(d), read with Schedule 3 paragraph 104, clarifies how previously made allowances are to be counted when calculating a balancing allowance for dredging expenditure, particularly in respect of historical initial allowances.

• When calculating a balancing allowance under section 488, the total of allowances previously made must include any initial allowances originally granted under earlier legislation (Finance Act 1956 or Capital Allowances Act 1968).
• Initial allowances for dredging were first introduced by section 17 of the Finance Act 1956, with equivalent provision later made by section 67 of the Capital Allowances Act 1968.
• For the purpose of determining allowances previously made (other than initial allowances themselves), the calculation should be carried out as though section 17 of the Finance Act 1956 had always been in effect, not just for periods after 1955–56.
• This ensures that the balancing allowance computation fully reflects all historical relief, preventing any gap in the record of allowances claimed against the original dredging expenditure.