Capital Allowances Act 2001 section 444

Disposal events: chargeable period for which disposal value is to be brought into account

Section 444 determines the chargeable period in which a disposal value must be brought into account when a disposal event occurs in relation to research and development qualifying expenditure.

• When a disposal event occurs during or after the chargeable period in which the R&D allowance was given, the disposal value is brought into account for the period in which the event occurs.
• If the relevant trade has been permanently discontinued before the disposal event takes place, the disposal value is instead brought into account for the chargeable period in which the trade ceased.
• In the unusual situation where a disposal event occurs before the chargeable period for which the R&D allowance is made, the disposal value is brought into account for the same chargeable period as the allowance.
• The effect is to ensure that every disposal event is matched to a specific chargeable period, so that any resulting balancing charge can be properly calculated.