Part 9

Dredging allowances

Writing-down and balancing allowances

Balancing allowances
488
1
A person is entitled to a balancing allowance for a chargeable period if—
a
qualifying expenditure has been incurred on dredging,
b
in that chargeable period, the qualifying trade for the purposes of which the expenditure was incurred has been—
i
permanently discontinued, or
ii
sold,
c
the person is the last person carrying on the qualifying trade before its discontinuance or sale, and
d
the amount of the expenditure exceeds the amount of the allowances previously made in respect of it, whether to the same or different persons.
2
The amount of the balancing allowance is the amount of the difference.
3
For the purposes of subsection (1)—
a
the permanent discontinuance of a trade does not include an event treated as a permanent discontinuance under section 577(2A) of this Act or section 18 of ITTOIA 2005 (effect of company ceasing to trade etc.), and
b
a sale does not include a sale which is within subsection (4) or (5).
4
A sale is within this subsection if any of the following conditions is met—
a
the buyer is a body of persons over whom the seller has control;
b
the seller is a body of persons over whom the buyer has control;
c
both the seller and the buyer are bodies of persons and another person has control over both of them;
d
the seller and the buyer are connected persons.
In this subsection “body of persons” includes a partnership.
5
A sale is within this subsection if it appears that the sole or main benefit which might be expected to accrue to the parties, or any of them, from—
a
the sale, or
b
transactions of which the sale is one,
is the obtaining of a tax advantage under any of the provisions of this Act apart from Part 2 (plant and machinery allowances).
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
Words in s. 488(3)(a) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5) , s. 883(1) , Sch. 1 para. 568 (with Sch. 2 )
Words in s. 488(3)(a) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 514 (with Sch. 2 Pts. 1, 2)