Corporation Tax Act 2010 section 234

No acquisition of share in partnership

Section 234 prevents an investor from claiming Community Investment Tax Relief (CITR) in respect of capital contributed to a Community Development Finance Institution (CDFI) that is structured as a partnership.

• Where the CDFI is a partnership, the qualifying investment cannot consist of or include capital contributed by the investor when they become a partner.
• This restriction extends to amounts described as loan capital if they are actually recorded as partners' capital in the partnership's accounts.
• The rule prevents investors from recharacterising a partnership capital contribution as a loan in order to claim CITR.
• The substance of the contribution, as reflected in the partnership accounts, determines whether the restriction applies, not merely its label.