CA60600 - RDA: Disposal events and disposal values
CAA01/S443 - S444
These are the events that are disposal events:
- Cessation of ownership of an asset representing qualifying expenditure.
- Demolition or destruction of an asset representing qualifying expenditure while it is owned by the taxpayer.
Cessation of use for research and development is not a disposal
event.
Example In the example at
CA60500 if Graham had stopped using the
building for research and development after 2 years and started to
use it as a drugs factory there would not have been a disposal
event then. There is not a disposal event until he sells the
factory to Norman.
A sale is a disposal event because it is a cessation of
ownership. In such a case the time of the cessation of ownership is
the earlier of:
- the time of completion, and
- the time when possession is given.
These are the disposal values for different disposal events.
| Disposal event | Disposal value |
| Sale of asset at not less than market value | Net sale proceeds |
| Demolition or destruction of asset | Net amount received for the remains together with any insurance money or other capital compensation |
| Any other event | Market value |
Bring a disposal value to account for the chargeable period in
which the disposal event occurs unless the trade has been
permanently discontinued. If the trade is permanently discontinued
before the disposal event bring the disposal value to account for
the chargeable period in which the trade is discontinued.
No disposal value is brought to account if there is a plant
and machinery balancing charge or an IBA balancing charge arising
from the event. For example, a building constructed to use for
research and development and on which RDA was claimed may change
its use and become an industrial building. There is no clawback of
allowances when the use of the building changes but when it is sold
the RDA is recovered as an IBA balancing charge.
