Capital Allowances Act 2001 section 463

Giving effect to allowances and charges

Section 463 explains how capital allowances and balancing charges under this Part are reflected in the calculation of trading profits.

• Capital allowances and balancing charges are given effect through the trade profit calculation for the relevant chargeable period.
• A capital allowance is treated as a deductible expense of the trade, reducing taxable profits.
• A balancing charge is treated as a trading receipt, increasing taxable profits.
• This treatment makes explicit the mechanism by which allowances and charges feed into the profit computation.