Capital Allowances Act 1990

129 Balancing events

(1) Subject to subsection (2) below, in relation to expenditure (“the original expenditure”) for which, apart from section 128, a person (“the former owner”) would be entitled to a writing-down allowance, the following events are balancing events for the purposes of this Part—

(a) the acquisition of the relevant interest by another person (“the new owner”) as mentioned in section 126; and

(b) where any building, fence or other works on the construction of which the expenditure was incurred is demolished, destroyed or otherwise ceases to exist as such.

(2) An event falling within subsection (1) above is not a balancing event for the purposes of this Part unless an election is made with respect to that event by notice given to the inspector not more than two years after the end of the chargeable period related to the occurrence of the event.

(3) Where, during the writing-down period applicable to the original expenditure, a balancing event falling within subsection (1)(a) above occurs, the amount of any writing-down allowances to which the new owner is entitled for chargeable periods which, or the basis periods for which, end after the balancing event shall be determined as if—

(a) that part of the writing-down period applicable to the original expenditure which falls after the balancing event were itself the writing-down period in which the allowances in respect of that expenditure were to be made; and

(b) the allowances were in respect of expenditure equal to the residue of the original expenditure (determined under section 128(2)(a)) immediately before the balancing event less the amount of any balancing allowance made to the former owner or, as the case may be, plus the amount on which any balancing charge was made on him by reason of the balancing event.

(4) Subject to subsection (5) below, an election under this section shall be made as follows—

(a) where the event falls within subsection (1)(a) above, jointly by the former owner and the new owner; and

(b) where the event falls within subsection (1)(b) above, by the former owner.

(5) No election may be made under this section if any person by whom that election should be made is not within the charge to tax in the United Kingdom; and no election may be made in relation to an acquisition falling within subsection (1)(a) above if it appears with respect to that acquisition, or with respect to transactions of which that acquisition is one, that the sole or main benefit which (apart from section 157) might have been expected to accrue to the parties or any of them was the obtaining of an allowance, or a greater allowance, under this Part.