Capital allowance balancing charge (UK)
A balancing charge can arise when the relevant disposal value exceeds the available balance in a capital-allowance pool; it generally increases taxable profit. The disposal value, private use, connected-party rules and assets receiving particular first-year allowances can alter the computation. A balancing charge is distinct from a balancing allowance.
Worked example
Assume a qualifying single-asset pool has a £6,000 balance before a disposal value of £8,000, and no special adjustment applies. The £2,000 excess is a balancing charge.
Common mistake
Treating a balancing charge as a further deduction, or overlooking special disposal rules for assets receiving particular first-year allowances.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | TX (UK) | Direct | June 2026–June 2027 |