Capital Allowances Act 2001 section 63

Cases in which disposal value is nil

Section 63 sets out the circumstances in which the disposal value of plant or machinery is treated as nil, meaning no balancing charge arises on disposal.

• When plant or machinery is given away as a gift that triggers an employment income tax charge on the recipient, its disposal value is nil — so the donor does not also face a balancing charge.
• Gifts of plant or machinery used in a qualifying activity to charities, charitable companies, community amateur sports clubs, heritage bodies, museums or designated educational establishments also have a nil disposal value.
• The nil disposal value for charitable and similar gifts can be clawed back if the donor or a connected person receives a benefit attributable to the gift, or if the donation is treated as a tainted charity donation linked to tax avoidance.
• Where expenditure on thermal insulation or safety measures is deemed to be expenditure on plant or machinery, the disposal value of that notional plant or machinery is nil.