Part 2

Plant and machinery allowances
Chapter 5

Allowances and charges

Writing-down and balancing allowances and balancing charges

Determination of entitlement or liability
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1
Whether a person is entitled to a writing-down allowance or a balancing allowance, or liable to a balancing charge, for a chargeable period is determined separately for each pool of qualifying expenditure and depends on—
a
the available qualifying expenditure in that pool for that period (“AQE”), and
b
the total of any disposal receipts to be brought into account in that pool for that period (“TDR”).
2
If AQE exceeds TDR, the person is entitled to a writing-down allowance or a balancing allowance for the period.
3
If TDR exceeds AQE, the person is liable to a balancing charge for the period.
4
The entitlement under subsection (2) is to a writing-down allowance except for the final chargeable period when it is to a balancing allowance.
5
The final chargeable period is given by section 65.
6
Subsection (2) is subject to section 110(1) (overseas leasing: allowances prohibited in certain cases).