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HMRC internal manual

Capital Allowances Manual

MEA: Allowances and charges: Balancing charges

CAA01/S417 sets out the occasions on which a balancing allowance rather than a writing down allowance is due.

Such allowances are given on all relieved qualifying expenditure for the chargeable period related to the permanent discontinuance of a trade of mineral extraction.

A balancing charge will arise:

  • where a disposal receipt is brought into account, and
  • that receipt exceeds the balance of unrelieved qualifying expenditure on that asset.


The provisions in CAA01/S417 indicate that the balancing charge takes account of:

  • the original qualifying expenditure,



  • all previous allowances and disposal receipts,



  • any other balancing charges relating to that expenditure.

The amount of the balancing allowance is the whole of the amount by reference to which writing down allowances on the asset would otherwise be given.