Capital Allowances Act 2001 section 458

Amount of allowances and charges

Section 458 sets out how to calculate the amount of writing-down allowances, balancing allowances and balancing charges for mineral extraction expenditure.

• The writing-down allowance is 25% per year of the excess of available qualifying expenditure (AQE) over total disposal values (TDV), adjusted proportionately for short or long chargeable periods or where the trade is carried on for only part of the period.
• A person may elect to receive a writing-down allowance of less than the full amount by specifying a reduced figure in their claim.
• A balancing charge arises when TDV exceeds AQE, and the charge equals that excess.
• A balancing allowance arises only in the final chargeable period and equals the amount by which AQE exceeds TDV.