CA23210 - PMA: WDA & balancing adjustments: Pooling

CAA01/S53, S54 & S55

Expenditure is pooled in order to calculate writing down allowances, balancing allowances and balancing charges CA20006. You pool expenditure by adding it together and deducting disposal values from the total. If the disposal values are more than the expenditure in the pool the difference is a balancing charge (CAA01/S55(3)). There are no balancing allowances until the qualifying activity ends (CAA01/S55(4) & S65). When it does, the balancing allowance is equal to the unrelieved qualifying expenditure.

Different types of pool

Where a person carries on more than one qualifying activity there is a pool (or pools) for each qualifying activity. These are the different types of PMA pools:

  • The main pool
  • The special rate pool
  • The overseas leasing pool, which contains all the expenditure on assets leased overseas to which the overseas leasing legislation CA24000 applies.
  • Single asset pools

Special rate pool

The special rate pool was introduced by FA2008. It contains expenditure incurred on or after 1/6 April 2008 on

  • the provision or replacement of integral features CA22300
  • long-life assets (LLAs) CA23700
  • solar panels, from 1/6 April 2012, see CA22335 (most solar panels were also classified as special rate before 1/6 April by virtue of being long life assets)
  • thermal insulation CA22220
  • from 1/6 April 2009, cars with higher CO2 emissions CA23535
  • from 1 April 2010, cushion gas (gas that functions as plant in a gas storage facility)

Overseas leasing pool

The overseas leasing pool contains all the expenditure on assets leased overseas to which the overseas leasing legislation CA24000 applies.

Single asset pools

Expenditure on any of the following should be allocated to a single asset pool:

  • A short life asset CA23600
  • A ship CA25000
  • An asset used partly for purposes other than the qualifying activity CA27000
  • An asset towards whose cost a partial depreciation subsidy is received CA27100
  • An asset for which contributions allowances are being claimed CA14500.

If expenditure is allocated to a single asset pool the allowances and charges are calculated separately and there is a balancing adjustment that ends the pool when there is a disposal event CA23240. No other expenditure goes into that pool.

Main rate pool

The main rate pool contains expenditure that does not fall to be allocated to any of the other pools in accordance with the rules described above.