I have a client who is looking into the value of the available PMAs on the property they acquired in 2009. The seller has stated that they have already claimed PMAs, however, there was no s198 election agreed at the point of sale.
I understand that, without an election to agree a value of the fixed plant, a disposal value must be determined and that the buyers' qualifying expenditure cannot exceed this value. An assessment (apportionment exercise) must be carried out to determine the disposal value of the fixed plant which, again, is limited to the original cost/valuation.
If WDAs have been claimed over the years there is likely to be a balancing charge incurred by the seller as a result of not agreeing to an election with the buyer.
Is this correct?