ICANTaxationCapital Allowances2025

A balancing allowance arises where an asset is disposed of and the:

AProceeds exceed the tax written down value
BProceeds are less than the tax written down valueCORRECT
CAsset was fully written off in the year of purchase
DAsset is transferred to a connected person at market value
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Why the answer is B, and why the others tempt you.
Where disposal proceeds fall short of the tax written down value, the shortfall is granted as a balancing allowance, giving relief for capital allowances not yet claimed.
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