Capital Allowances Act 2001 section 376

Calculation of allowance after acquisition

Section 376 explains how to recalculate the writing-down allowance for agricultural buildings when a property changes hands and the acquisition triggers a balancing event following an election.

• After a balancing event, the remaining qualifying expenditure is spread evenly over the rest of the writing-down period using the formula: RQE × A ÷ B
• If the property changes hands again and another balancing event occurs, the writing-down allowance must be recalculated afresh using the same method
• The residue of qualifying expenditure used in the formula is worked out after taking into account any balancing adjustment arising on the event, and any previously restricted balancing allowance is treated as if it had been given in full
• If the owner does not hold the relevant interest for the whole of a chargeable period, the allowance for that period is proportionately reduced