Taxes Consolidation Act 1997 section 289

Calculation of balancing allowances and balancing charges in certain cases

Section 289 sets out how balancing allowances and balancing charges are calculated for plant and machinery, particularly where assets are not sold at full market value or are retained, gifted or transferred.

• Defines "open-market price" and uses it as the default value where assets are not sold at arm's length.
• Ensures post-cessation sale, insurance or compensation receipts are taken into account on cessation of trade.
• Deems assets to be disposed of at open-market value where retained, gifted or sold below market value (subject to exceptions).
• Allows a joint election between connected persons to transfer at the lower of market value or tax written down value, with restrictions.

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