Corporation Tax Act 2010 section 243

Disposal of loan during 5 year period

Section 243 deals with the withdrawal of Community Investment Tax Relief (CITR) when an investor disposes of a loan investment during the 5 year period, and defines which types of disposal are permitted.

• If a loan investment is disposed of (wholly or partly) within the 5 year period, any CITR attributable to that investment must be withdrawn, unless the whole disposal qualifies as a "permitted disposal"
• Permitted disposals include distributions on winding up the CDFI, total loss or destruction of the asset, a negligible value claim, or a disposal made after the CDFI has lost its accreditation
• A full or partial repayment of the loan is not treated as a disposal, so repayments alone do not trigger withdrawal of CITR
• Where a disposal is permitted, previously obtained tax relief is not withdrawn, but no further CITR may be claimed for subsequent accounting periods