If in the year of disposal, the cost of remaining qualifying equipment (excluding cost of the equipment disposed of) acquired in the same basis period as the equipment disposed of is more than or equal to the expenditure cap applicable for the period, waiver will be given automatically. You only need to make this declaration in your tax return. There is no need to apply or get prior approval of the waiver.
Company A acquired $1,300,000 worth of qualifying equipment during its accounting year that ended on 31 Dec 2015. It claimed enhanced allowances on equipment cost of $1,200,000, (which is the combined expenditure cap for YA 2016 to YA 2018) in its return for YA 2016.
In Oct 2016 (YA 2017), it disposed of a piece of qualifying equipment with a cost of $80,000 which it acquired in year 2015 and claimed enhanced allowances of $240,000 (300% x $80,000) in YA 2016.
As the cost of the remaining qualifying equipment is $1,220,000 ($1,300,000 - $80,000) which is higher than the expenditure cap of $1,200,000, the enhanced allowances of $240,000 will not be clawed back i.e. $240,000 will not be deemed as income chargeable to tax in the year of disposal.