Commentary

B3.334 Disposal events and disposal values—plant and machinery allowances

Business tax
Business tax | Commentary

B3.334 Disposal events and disposal values—plant and machinery allowances

Business tax | Commentary

B3.334 Disposal events and disposal values—plant and machinery allowances

As indicated at B3.332, the availability of writing-down allowances, balancing allowances and balancing charges for a chargeable period depends on the available qualifying expenditure 'AQE' in the pool (see B3.333) and the total of any disposal receipts 'TDR' to be brought into account in that pool for that period (see B3.334).The provisions described below determine TDR.

A disposal event means an event of a kind that requires a disposal value to be brought into account1. A disposal receipt means a disposal value that a person is required to bring into account on the occurrence of certain events2. The general rules are described below; special rules apply to particular assets and trades and these are described in B3.341–B3.360.

If qualifying expenditure has been allocated to a pool and more than one disposal event occurs in respect of the plant or machinery, a disposal value has to be brought into account in the pool in connection with the first event only (except in certain specified cases)3.

Where one of the following events occurs in a chargeable period in respect of plant or machinery on which a person has incurred qualifying expenditure, a disposal value has to be brought into account for that period4:

  1.  

    •     the plant or machinery ceases to be owned by him

  2.  

    •     he loses possession of it in circumstances such that it is reasonable to assume the loss is permanent

  3.  

    •     the plant or machinery has been in use for mineral exploration and

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