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Capital Allowances Act 2001

Section 337: Writing off or increase of expenditure where balancing adjustment made

1139.This section is based on section 8(9), (10) and (11) of CAA 1990. It adjusts the residue of qualifying expenditure for a balancing adjustment if a building is sold.

1140.If a balancing allowance is made on the sale, subsection (2) writes off the excess of the residue of qualifying expenditure before the balancing event over the net proceeds from that event. If there is a balancing charge, subsection (3) adds it to the residue of qualifying expenditure at the time of the balancing event.

1141.Subsection (4) modifies this rule if a balancing charge is made under section 319(6). This occurs if a building has not been an industrial building throughout a relevant period of ownership and a balancing charge is made on the difference between the net allowances made and the adjusted net cost of the building. In this situation the residue of qualifying expenditure after the balancing event must not exceed the net proceeds from that event.

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