318 Meaning of “sale, insurance, salvage or compensation moneys”

This section defines the phrase “sale, insurance, salvage or compensation moneys” in relation to an event which gives rise or might rise to a balancing allowance or a balancing charge to or on any person. It is by reference to such moneys that a balancing allowance or balancing charge is computed. The phrase means —

• (a) where there is a sale of property, the net proceeds of the sale (this covers straight sales of property or an event which is equivalent to a sale, for example, the surrender of a lease),
• (aa) where there is a grant of a right to use or otherwise deal with all or part of machinery or plant consisting of computer software or the right to use or otherwise deal with computer software, the consideration in money or money’s worth,
• (b) where the property is demolished or destroyed, any amount received from the sale of, say, scrap machinery, and any amount received as insurance moneys or compensation for the demolition or destruction of the property,
• (c) where machinery or plant is stolen or otherwise lost (other than by its demolition or destruction), any insurance moneys or compensation received in respect of the loss of the property, and
• (d) where an industrial building or structure ceases altogether to be used, any compensation received in respect of that event.
• (e) where an industrial building or structure ceases to be a relevant facility (see section 274(2A)(b)), the aggregate of the residue of expenditure incurred and the allowances already made under Chapter 1 of Part 9.

The references in the definition to “compensation” relate only to compensation in so far as it consists of capital sums i.e. which is not treated as a revenue receipt of the recipient.

Relevant Date: Finance Act 2019