Commentary on Sections Glossary History Overview
1064.This Chapter provides for balancing adjustments. These are made on the occurrence of certain events, referred to in this Part as balancing events. A balancing adjustment is either a balancing allowance or a balancing charge.
1065.Section 314 provides for balancing allowances and charges. It also provides that no balancing adjustment is made if a balancing event occurs more than 25 years after first use of the building.
1066.Section 315 sets out the main balancing events and points to provisions which provide other balancing events.
1067.Section 316 identifies the proceeds from balancing events.
1068.Section 317 provides one of the other balancing events mentioned in section 315. It applies if a hotel has ceased to be a qualifying hotel (see section 279) for more than two years.
1069.Sections 318 to 320 state the general rules for calculating a balancing adjustment. The calculation differs according to whether or not the building was used as an industrial building, or for R&D, throughout a person’s relevant period of ownership.
1070.Section 318 provides the rule if the building has been so used throughout.
1071.Section 319 provides the rule if a building has not been in such use throughout.
1072.Section 320 limits the amount of a balancing charge to the total allowances made.
1073.Sections 321 to 324 define terms used in section 319.
1074.Sections 325 and 326 restrict balancing allowances if:
	a sale subject to a subordinate interest is made involving connected persons; or
	it appears that the main purpose was to obtain an allowance.
1075.Sections 327 to 331 are concerned with expenditure on the construction of buildings in enterprise zones.
1076.Section 328 provides that a balancing event occurs if capital value is realised on a building. No balancing allowance is made for such an event. And there are special rules for calculating a balancing charge.
1077.Section 329 gives the amount of the capital value attributable to a subordinate interest. This amount is treated in section 328 as the proceeds from the balancing event.
1078.Section 330 provides an exception to section 328. That section does not apply if capital value is realised more than seven years after an agreement was made to incur qualifying expenditure.
1079.Section 331 defines various terms for the purposes of sections 328 to 330.