disposal value

If the disposal value exceeds the relevant pool total, record a balancing charge.

In these cases, the disposal value is treated as nil for capital allowance purposes.

If the disposal value is more than the unrelieved expenditure in the pool, you will need to record a balancing charge.

If the disposal value is more than the value of the pool, this results in a 'balancing charge' equal to the difference.

The disposal value is usually:

If the disposal values are less than the value of the pool/short-life asset pool, you can claim the value remaining as a balancing allowance.

If you give a used piece of equipment to a charity or CASC, the disposal value may be nil in certain circumstances.

If you sold or disposed of any main rate or special rate pool assets, deduct the appropriate disposal value from the relevant pool total.

If these disposal values are more than the remaining value of the pool or short-life asset, you have to calculate the difference and add this amount to your profits.

If you sell or otherwise dispose of a pooled asset, you have to deduct the disposal value from any remaining balance in the relevant pool (main or special rate) in which the expenditure on it was included.

If your business is ceasing and the disposal value of the assets in any of your pools is less than the unrelieved expenditure in that pool then you can claim a balancing allowance in respect of the difference.

If the disposal value of the item is less than the remaining value in that pool, then you simply reduce the value of the appropriate pool, unless you dispose of assets in the accounting period when the business ceases - see below.

However, if you acquired the asset from a connected person (see below) and it originally cost them more than they sold it to you for, you limit the disposal value to what it cost them, not what they sold it to you for.

Depreciation is the process of allocation of the difference between the total acquisition cost of an asset (or its valuation) and its estimated residual value (i.e-predicted disposal value at the end of its useful life) over the total useful life of the asset.