The balancing adjustment is made by reference to the 'disposal value' of the item concerned (see EIM36690). In a straightforward case where the plant is the only item on which the employee has claimed allowances in the past and it is sold for its market value, the balancing adjustment for the year of sale will be
Both balancing charges and allowances have to be adjusted to
take private use into account in accordance with
EIM36570, see example
Where the extent of private use has varied over the life of the item an average fraction has to be used.
For 2001/02 and earlier years there are some special rules for dealing with capital allowances and balancing allowances on motor vehicles and bicycles, see SE36970 and example SE36935 . Remember that employees cannot claim capital allowances (including balancing allowances) for cars, vans, motor cycles or bicycles after 5 April 2002 (see EIM36520).