Capital Allowances Act 2001 section 212

Reduction of allowances and charges on expenditure in single asset pool

Section 212 deals with how writing-down allowances, balancing allowances and balancing charges must be scaled back when expenditure sits in a single asset pool because a partial depreciation subsidy has been received.

• Where expenditure is held in a single asset pool due to a partial depreciation subsidy, any writing-down allowance, balancing allowance or balancing charge must be reduced to a just and reasonable amount in light of the relevant circumstances.
• When calculating unrelieved qualifying expenditure carried forward, any reduction made to a writing-down allowance under this rule is ignored — so the carry-forward figure is preserved as though no reduction had been made.
• If the person does not claim the writing-down allowance at all, or claims less than the full amount, the unrelieved qualifying expenditure carried forward is treated as not reduced or only proportionately reduced.
• The carry-forward rule ensures that a restriction applied in one period because of a partial depreciation subsidy does not permanently distort the pool value in later periods.