Capital Allowances Act 2001 section 322

Starting expenditure

Section 322 defines "starting expenditure", which is the baseline figure used when calculating balancing allowances or balancing charges on industrial buildings.

• Where the person receiving the balancing allowance or charge is the original spender, the starting expenditure equals the full qualifying expenditure originally incurred.
• Where the person is not the original spender (for example, a subsequent purchaser), the starting expenditure is the residue of qualifying expenditure at the start of their period of ownership.
• If demolition costs apply, the starting expenditure is increased by the net cost of demolition.
• The starting expenditure forms the basis from which balancing adjustments are calculated when a balancing event occurs.