Capital Allowances Act 2001 section 393O

Proceeds from balancing events

Section 393O determines the amount of proceeds to be brought into account when a balancing event occurs in relation to a fixture that is an integral feature or other item on which the special rate pool allowances are claimed.

• When a balancing event occurs (such as a sale or disposal of a fixture), the proceeds from that event must be calculated for the purpose of determining any balancing allowance or balancing charge.
• The proceeds are generally the sale price, insurance money, compensation, or other capital sum received in connection with the balancing event, but they cannot exceed the qualifying expenditure originally incurred.
• Where part of the proceeds relates to the fixture and part to other assets, a just and reasonable apportionment must be made to identify the amount attributable to the fixture.
• If no capital sum is received (for example, where a fixture is scrapped with no salvage value), the proceeds from the balancing event are treated as nil.