When an asset in respect of which capital allowances (www.practicallaw.com/A34598) have been claimed is sold, there is a comparison between the sale price and the tax written down value (www.practicallaw.com/A37072). (In the case of plant and machinery, this is generally done by reference to the entire pool of qualifying assets rather than on an asset by asset basis.) If the proceeds exceed the tax written down value, a balancing charge arises which is added to trading profits. This has the effect of clawing back excess allowances previously claimed.