CA45900 - Business Premises Renovation Allowance: proceeds from balancing events, calculation of balancing adjustment
CAA01/ S360O and s360P
»Ê¹ÚÌåÓýappse are the proceeds from the various balancing events.
| Balancing event | Proceeds |
|---|---|
| »Ê¹ÚÌåÓýapp sale of the relevant interest | »Ê¹ÚÌåÓýapp net proceeds of sale |
| »Ê¹ÚÌåÓýapp grant of a long lease out of the relevant interest | »Ê¹ÚÌåÓýapp greater of the capital sum paid for the grant of the lease, and the commercial premium |
| »Ê¹ÚÌåÓýapp coming to an end of a lease where a person entitled to the lease is connected with a person entitled to a superior interest | »Ê¹ÚÌåÓýapp market value of the relevant interest in the qualifying building at the time of the event |
| »Ê¹ÚÌåÓýapp death of the person who incurred the qualifying expenditure | »Ê¹ÚÌåÓýapp residue of qualifying expenditure immediately before the death |
| »Ê¹ÚÌåÓýapp demolition or destruction of the qualifying building | »Ê¹ÚÌåÓýapp net amount received for the remains together with any insurance monies received in respect of the demolition or destruction and any other capital compensation received |
| »Ê¹ÚÌåÓýapp qualifying building ceases to be qualifying business premises | »Ê¹ÚÌåÓýapp market value of the relevant interest at the time of the event |
This is how you calculate a balancing allowance or balancing charge.
Compare the proceeds from the balancing event with the residue of qualifying expenditureimmediately before the balancing event.
»Ê¹ÚÌåÓýappre is a balancing allowance if there are no proceeds or if the residueis more than the proceeds. »Ê¹ÚÌåÓýapp amount of the balancing allowance is
- the residue if there are no proceeds
- the difference if the proceeds are less than the residue.
»Ê¹ÚÌåÓýappre is a balancing charge if the residue is less than the proceeds.»Ê¹ÚÌåÓýapp amount of the balancing charge is
- the proceeds if the residue is nil
- the difference otherwise.
»Ê¹ÚÌåÓýappre is a restriction on the amount of a balancing charge. Abalancing charge may not be more than the initial allowances made to the person plus WDAsmade for chargeable periods ending on or before the date of the balancing event.
Example
Maureen incurs qualifying expenditure of £100,000 and claims 100% initial allowance sothe residue is nil. She sells the building for £120,000 3 years later. »Ê¹ÚÌåÓýapp balancingcharge is the proceeds, £120,000 but it is restricted to £100,000, the allowances made.