Corporation Tax Act 2010 section 228

Conditions to be met in relation to shares

Section 228 sets out two conditions that shares must satisfy in order to qualify as an investment in a Community Development Finance Institution (CDFI) for the purposes of community investment tax relief.

• Shares must be subscribed for entirely in cash and be fully paid up by the investment date, with no undertaking to pay further cash to the CDFI in the future in connection with their acquisition.
• Shares must not carry any present or future right to be redeemed during the 5 year period following the investment.
• Shares must not carry any present or future right to be converted into or exchanged for a loan, securities, shares or other rights that are themselves redeemable within that 5 year period.
• If any element of the subscription price remains outstanding or is subject to a future payment undertaking, the shares will fail to meet the conditions and the investment will not qualify for relief.