Capital Allowances Act 2001 section 384

Exclusion of proportion of proceeds

Section 384 requires that the proceeds from a balancing event be reduced to exclude amounts relating to assets that did not qualify for agricultural buildings allowances, and to reflect any earlier restriction applied to the original qualifying expenditure.

• Proceeds from a balancing event must exclude, on a just and reasonable apportionment, any amount attributable to assets for which no allowance could be made — for example, the value of land sold alongside a qualifying building
• Where the original qualifying expenditure was restricted because it related to a farmhouse or a building only partly used for husbandry, the balancing event proceeds must be reduced in the same proportion as the original restriction
• This ensures that the disposal value feeding into the balancing adjustment matches the expenditure that actually attracted allowances, preventing an unfairly large balancing charge or an overstated balancing allowance
• These rules do not override the general statutory provisions for apportioning sale proceeds between different assets and the procedures for resolving disputes about such apportionments