Part 3

Industrial buildings allowances
Chapter 7

Balancing adjustments

Qualifying enterprise zone expenditure: effect of realising capital value

Balancing adjustment on realisation of capital value
328
1
There is a balancing event if, while the building is an industrial building or after it has ceased to be one, any capital value is realised.
2
No balancing allowance is to be made because of a balancing event under this section.
3
The amount of capital value realised is to be treated as the proceeds from the balancing event.
4
If a balancing event under this section occurs—
a
section 319 (balancing adjustment where building not an industrial building
etc.
throughout) has effect as if, immediately after the balancing event, the starting expenditure were reduced by the amount of capital value realised, and
b
if the net proceeds of a sale of the relevant interest fall to be increased under section 325(4) (balancing allowances restricted where sale subject to subordinate interest), those proceeds as so increased are reduced by the amount of any capital value realised before the sale.
5
Capital value is realised if an amount of capital value is paid which is attributable to an interest in land (“
the subordinate interest
”) to which the relevant interest in the building is or will be subject.
6
The capital value is realised on the making of the payment.
7
The amount of capital value realised is the amount of capital value that is attributable to the subordinate interest under section 329.
Pt. 3 modified (24.2.2003) by Proceeds of Crime Act 2002 (c. 29), s. 458(1), Sch. 10 para. 18 (with Sch. 10 para. 21); S.I. 2003/120, art. 2, Sch. (with arts. 3 4) (as amended (20.2.2003) by S.I. 2003/333, art. 14)
S. 45H(2) modified (with effect in accordance with s. 167 of the amending Act) by Finance Act 2003 (c. 14) , Sch. 30 para. 7
Pt. 3 modified (5.10.2004) by Energy Act 2004 (c. 20) , s. 198(2) , Sch. 4 para. 5 ; S.I. 2004/2575 , art. 2(1) , Sch. 1
Pt. 3 modified (E.W.S.) (8.6.2005) by Railways Act 2005 (c. 14), s. 60(2), Sch. 10 para. 4; S.I. 2005/1444, art. 2(1), Sch. 1
Pt. 3 modified (8.6.2005) by Railways Act 2005 (c. 14), s. 60(2), Sch. 10 para. 15; S.I. 2005/1444, art. 2(1), Sch. 1
Pt. 3 modified (24.7.2005) by Railways Act 2005 (c. 14), s. 60(2), Sch. 10 para. 24; S.I. 2005/1909, art. 2, Sch.
Pt. 3 restricted (19.7.2007) by Finance Act 2007 (c. 11), s. 36(1)-(3), (7)
Pt. 3 omitted (with effect in relation to chargeable periods beginning on or after 1.4.2011 for corporation tax purposes and 6.4.2011 for income tax purposes in accordance with ss. 84(1)(3)(4), 85, 86 of the amending Act) by virtue of Finance Act 2008 (c. 9), s. 84(2) (with Sch. 27)
Pt. 3 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 para. 21(1)
Pt. 3 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 para. 38(1)