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HMRC internal manual

Capital Allowances Manual

Overseas leasing: Recovery of excess allowances when no allowances are due

CAA01/S114 & S115

When plant or machinery is leased overseas in such a way that no allowances at all are due CA24300 you have to recover all the allowances that have been made and make sure that no more allowances are given. This is how you do it:

You make a balancing charge that is equal to the allowances previously given less any amount already recovered CA24210 because the plant or machinery had begun to be leased overseas.

You bring a disposal value that is equal to the expenditure on the plant or machinery less the balancing charge to account.

If the person on whom the balancing charge is to be made acquired the plant or machinery from a connected person or in a series of connected person transactions you take account of any allowances made to those persons. This does not apply if the qualifying activity was treated as continuing at the time of the connected person transaction.