CA45900 - Business Premises Renovation Allowance: proceeds from balancing events, calculation of balancing adjustment
CAA01/ S360O and s360P
These are the proceeds from the various balancing events.
| Balancing event | Proceeds |
| The net proceeds of sale |
| The greater of
|
| The market value of the relevant interest in the qualifying building at the time of the event |
| The residue of qualifying expenditure immediately before the death |
| The net amount received for the remains together with any insurance monies received in respect of the demolition or destruction and any other capital compensation received |
| The market value of the relevant interest at the time of the event |
This is how you calculate a balancing allowance or balancing
charge.
Compare the proceeds from the balancing event with the
residue of qualifying expenditure immediately before the balancing
event.
There is a
balancing allowance if there are no proceeds or if
the residue is more than the proceeds. The amount of the balancing
allowance is
- the residue if there are no proceeds
- the difference if the proceeds are less than the residue.
There is a balancing charge if the residue is less than the proceeds. The amount of the balancing charge is
- the proceeds if the residue is nil
- the difference otherwise.
There is a
restriction on the amount of a balancing charge. A
balancing charge may not be more than the initial allowances made
to the person plus WDAs made for chargeable periods ending on or
before the date of the balancing event.
Example
Maureen incurs qualifying expenditure of £100,000 and
claims 100% initial allowance so the residue is nil. She sells the
building for £120,000 3 years later. The balancing charge is
the proceeds, £120,000 but it is restricted to £100,000,
the allowances made.
