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HMRC internal manual

Capital Allowances Manual

PMA: WDA & balancing adjustments: Pooling

CAA01/S53 & S54

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. There are no balancing allowances until the qualifying activity ends. When it does, the balancing allowance is equal to the unrelieved qualifying expenditure.

Where a person carries on more than one qualifying activity there is a pool (or pools) for each qualifying activity. There are single asset pools, class pools, a special rate pool and the main pool, For example there is an overseas leasing pool that contains all the expenditure on assets leased overseas to which the overseas leasing legislation CA24000 applies. 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.

These are the assets expenditure on which is allocated to a single asset pool:

  • Cars above the cost threshold where the expenditure was incurred before 1 April 2009 (where the taxpayer is within the charge to corporation tax) or 6 April 2009 (where the taxpayer is within the charge to income tax) CA23500;
  • Short life assets CA23600;
  • Ships CA25000;
  • Assets used partly for other purposes CA27000;
  • Assets towards whose cost a partial depreciation subsidy is received CA27100;


Contributions towards the cost of plant or machinery are also allocated to a single asset pool CA14500.