CA60600 - RDA: Disposal events and disposal values
CAA01/S443 - S444
A person is required to bring to account a disposal value in respect of qualifying expenditure if:
- that person ceases to own an asset representing the qualifying expenditure; or
- an asset representing the expenditure is demolished or destroyed at a time while it is owned by that person.
Cessation of use for research and development is not in itself a disposal event.
Example
Graham builds a laboratory and uses it for research and development purposes. He claims RDAs. After 2 years, he stops using the building for research and development and starts to use it as a drugs factory. There is no disposal event at this point. The following year, Graham sells the building to Norman. The sale is a disposal event because it results in Graham ceasing to own the asset representing the qualifying expenditure.
These are the disposal values for different disposal events.
| Disposal event | Disposal value |
| Sale of asset at not less than market value | Net sale proceeds |
| Demolition or destruction of asset | Net amount received for the remains together with any insurance money or other capital compensation |
| Any other event | Market value |
Bring a disposal value to account for the chargeable period in which the disposal event occurs unless the trade has been permanently discontinued. If the trade is permanently discontinued before the disposal event bring the disposal value to account for the chargeable period in which the trade is discontinued.
No disposal value is brought to account if the disposal event gives rise to a balancing charge for plant and machinery allowance purposes.