Balancing charge arises where:
ASale proceeds of an asset exceed its tax written down valueCORRECT
BSale proceeds are less than the tax written down value
CThe asset is scrapped with no proceeds
DThe asset is still in use at the year end
ICANTaxationCapital Allowances2024
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Why the answer is A, and why the others tempt you.
A balancing charge is the clawback of excess capital allowances previously granted, arising when disposal proceeds exceed the tax written down value. The charge is restricted to the total allowances already claimed on that asset.
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