Capital Allowances Act 2001 section 443

Disposal values and disposal events

Section 443 sets out when a disposal value must be brought into account for research and development allowances purposes, and how the amount of that disposal value is determined depending on the type of disposal event.

• A disposal value must be recognised when you cease to own an asset on which qualifying R&D expenditure was incurred, or when such an asset is demolished or destroyed while you still own it.
• The disposal value depends on the event: for a sale at market value or above, it is the net sale proceeds; for demolition or destruction, it is the net amount received for the remains plus any insurance or other capital compensation; and for any other disposal event, it is the market value at the time.
• No disposal value is required under this section if the same event already gives rise to a balancing charge under the plant and machinery allowances rules in Part 2 of the Act.
• Special rules may modify the disposal value in cases involving demolition costs, oil licence disposals, or additional VAT rebates.