Capital Allowances Act 2001 section 62

General limit on amount of disposal value

Section 62 sets a cap on the disposal value that must be brought into account when plant or machinery is disposed of, ensuring it cannot exceed the original qualifying expenditure.

• The disposal value a person must bring into account for any plant or machinery cannot exceed the qualifying expenditure that person incurred on acquiring it.
• Where the plant or machinery was acquired through one or more transactions between connected persons, a higher cap may apply based on the greatest qualifying expenditure incurred by any party in the chain.
• In connected-person scenarios, the disposal value is capped at the highest amount of qualifying expenditure incurred by any party to any of the transactions in the chain.
• A separate rule applies where an additional VAT rebate has been received in respect of the original expenditure, which may further reduce the disposal value limit.