Capital Allowances Act 2001 section 239

Limit on disposal value where additional VAT rebate

Section 239 sets out how the cap on disposal values for plant and machinery is adjusted when additional VAT rebates have been received in respect of the original expenditure.

• When a disposal value arises and an additional VAT rebate has been received, the disposal value is capped at the original expenditure minus any additional VAT rebates from previous periods
• Where the disposal value arises solely because of an additional VAT rebate, the cap is instead the original expenditure minus any disposal values already brought into account from earlier events
• Where the plant or machinery was acquired through transactions between connected persons, the disposal value cap is the highest net qualifying expenditure (after deducting VAT rebates) of any party in the chain
• These rules prevent balancing charges from exceeding the total allowances previously given in respect of the plant or machinery