Tax relief on the balancing allowance

If the asset is disposed of then there will always be a balancing charge or allowance and therefore a tax effect (a balancing allowance gives rise to a tax saving, a balancing charge gives rise to more tax payable).

This is all explained in my free lectures on investment appraisal with tax – the lectures are a complete free course for Paper F9 and cover everything needed to be able to pass the exam well. (Provided, of course, that you also buy a current edition of a Revision Kit from one of the ACCA approved publishers and practice all of the questions. Practice is vital to passing the exam.)