Taxes Consolidation Act 1997 section 274

Balancing allowances and balancing charges

Section 274 deals with balancing allowances and balancing charges, which are adjustments to the capital allowances previously granted in respect of industrial buildings and structures when certain events occur.

• A balancing allowance or charge may arise when an industrial building is sold, a leasehold interest ends, the building is demolished or ceases to be used, or a long lease premium is received.
• A balancing allowance gives additional relief where the residue of expenditure exceeds any sale or compensation proceeds, while a balancing charge claws back allowances where the proceeds exceed the residue.
• No balancing adjustment can arise once the building's holding period has expired, and the length of this period depends on the type of building and when the expenditure was incurred.
• A balancing charge on any person cannot exceed the total capital allowances actually granted to that person in respect of the building.