You can claim a scrapping allowance when you sell a business asset, it is stolen, you lose it or it’s destroyed (say in a fire) and the amount you received for it is less than the net tax value of the asset.
You can claim a scrapping allowance on any asset that qualified for some sort of capital allowance and you claimed this allowance under the following income tax provisions:

• General wear and tear or depreciation (Section 11(e);
• Manufacturing assets (Section 12C);
• Small business corporation assets (Section 12E)

You can only claim the allowance on assets that have an expected useful life of not more than 10 years and in the year that you receive the final consideration for the asset.

The scrapping allowance is based upon the following formula:

Scrapping allowance = Cost of asset – (consideration received + capital allowances claimed on the asset)

If the answer is a negative amount, there’s no allowance. If it’s positive then you may claim a scrapping allowance equal to the amount calculated.