Capital Allowances Act 2001 section 61

Disposal events and disposal values

Section 61 identifies the events that trigger a disposal for capital allowances purposes and sets out the disposal value that must be brought into account for each type of event.

• A disposal event occurs when plant or machinery is sold, lost, destroyed, abandoned, put to non-qualifying use, leased under a long funding lease, or the qualifying activity permanently ceases.
• The disposal value depends on the type of event — typically the sale proceeds, insurance or compensation received, or the market value of the asset at the time of the event.
• Where plant or machinery is sold at below market value and the buyer either cannot claim capital allowances or is a connected dual resident investing company, the disposal value is the market value rather than the actual sale price.
• Where plant or machinery begins to be leased under a long funding lease, the disposal value is the market value at the start of the lease term (for operating leases) or the greater of market value and qualifying lease payments (for finance leases).