Capital Allowances Act 2001 section 360O

Proceeds from balancing events

Section 360O defines how to determine the amount of proceeds arising from each type of balancing event for the purposes of business premises renovation allowances.

• The proceeds from a balancing event are the amounts received or receivable by the person who incurred the qualifying expenditure, determined according to a table matching each event type to its corresponding proceeds measure.
• For sales, the proceeds are the net sale proceeds; for long lease grants, the proceeds are the higher of the actual capital sum paid and the arm's length premium (referred to as the commercial premium); for lease terminations between connected persons, and for buildings ceasing to be qualifying business premises, the proceeds are the market value of the relevant interest at the time of the event.
• Where the person who incurred the qualifying expenditure dies, the proceeds are set equal to the residue of qualifying expenditure immediately before death, meaning there is no balancing adjustment gain or loss arising on death.
• Where the qualifying building is demolished or destroyed, the proceeds are the net amount received for the remains plus any insurance money and any other capital compensation received in respect of the demolition or destruction.