OT42600 | Non-Residents Working on the UK Continental Shelf: Capital Allowances - Part use of plant & machinery - Effect of significant reduction in use for purposes of qualifying activity

CAA01\S208 provides for a balancing adjustment to be made if the proportion of taxable use is reduced and the allowances that have been given are excessive. It has effect where the proportion of qualifying use of an asset in a single asset pool is reduced and the open market value of the asset at the end of the chargeable period exceeds the balance in the pool by more than £1m.

Where this section applies the plant or machinery is treated as sold immediately before the end of the chargeable period, which gives rise to a balancing adjustment, and reacquired at the start of the following chargeable period for the disposal value, which goes into a new single asset pool, and an example is given at CA27300.