Taxes Consolidation Act 1997 section 288

Balancing allowances and balancing charges

Section 288 sets out when a balancing allowance or balancing charge arises on plant and machinery, how it is calculated, and the special rules that apply in certain cases such as software, leases and decommissioning grants.

• A balancing adjustment arises when plant or machinery is disposed of, ceases to be used in the trade, the trade ends, certain software rights are granted, or specific lease events occur.
• A balancing allowance arises where the tax written down value exceeds sale proceeds; a balancing charge arises where proceeds exceed the remaining unallowed expenditure, subject to limits.
• Special rules apply for software, small disposals under €2,000, specified intangible assets, grant-aided assets and successive balancing events.
• Additional provisions deal with lease valuations under section 299 arrangements and the spreading of balancing charges on fishing vessel decommissioning payments.

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