Capital Allowances Act 2001 section 393N

Balancing events

Section 393N defines the events that trigger a balancing adjustment in relation to mineral extraction allowances, determining when a balancing allowance or balancing charge may arise.

• A balancing event occurs when a person ceases to work a mineral asset, disposes of it, or the asset is permanently lost or destroyed.
• When a balancing event takes place, the person may be entitled to a balancing allowance (if they have not claimed enough allowances) or may face a balancing charge (if they have claimed too much).
• The purpose of a balancing event is to reconcile the total allowances claimed against the actual economic use or proceeds received from the mineral extraction asset.
• These provisions were amended by Finance Act 2012, Schedule 39, paragraph 37, which updated the framework for balancing events in mineral extraction.