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HMRC internal manual

Tonnage Tax Manual

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Schedule 22 Finance Act 2000: Part IX the ring fence - capital allowances - Para 83 during - industrial buildings - balancing charges

FA00/SCH22/PARA83

(1) This paragraph applies where, in an accounting period during which a company is subject to tonnage tax, a balancing event occurs in relation to an industrial building in respect of which qualifying expenditure was incurred by the company before its entry into tonnage tax.

(2) A “balancing event” means an event by reason of which the company is required by Part 3 of the Capital Allowances Act 2001 to bring into account any proceeds. In determining whether such an event has occurred references in that Part of that Act to a trade or undertaking shall be read as including the company’s tonnage tax trade.

(3) Where this paragraph applies-

(a) the proceeds to be brought into account in respect of the industrial building are limited to the market value of the relevant interest when the company entered tonnage tax; and

(b) the amount of any balancing charge under that Part is reduced in accordance with paragraph 78.

History

Amended by Schedule 2 CAA 2001. Up to 31st March 2001 the paragraph read:

(1) This paragraph applies where, in an accounting period during which a company is subject to tonnage tax, a disposal event occurs in relation to an industrial building or structure in respect of which qualifying expenditure was incurred by the company before its entry into tonnage tax.

(2) A “disposal event” means an event by reason of which the company is required by Part I of the Capital Allowances Act 1990 to bring into account sale, insurance, salvage or compensation moneys.

In determining whether such an event has occurred references in that Part of that Act to a trade or undertaking shall be read as including the company’s tonnage tax trade.

(3) Where this paragraph applies-

(a) the sale, insurance, salvage or compensation moneys to be brought into account in respect of any industrial building or structure are limited to the market value of the relevant interest when the company entered tonnage tax; and

(b) the amount of any balancing charge under that Part is reduced in accordance with paragraph 78.

References

Balancing charges on industrial buildings TTM09410