Capital Allowances Act 2001 section 137

Effect of deferment

Section 137 explains how a claim to defer a balancing charge on the disposal of a ship is given effect by allocating the deferred amount to the appropriate non-ship pool.

• When a balancing charge arises on the disposal of a ship, the taxpayer may claim to defer all or part of that charge
• The deferment works by allocating the deferred amount to the appropriate non-ship pool for the chargeable period to which the claim relates
• This allocation reduces or, if the full balancing charge is deferred, completely cancels the effect of the balancing charge
• The mechanism operates because the ship disposal creates a disposal value in the non-ship pool, and the deferred amount offsets this