Corporation Tax Act 2010 section 246

Value received by investor during 6 year period: loans

Section 246 explains how Community Investment Tax Relief (CITR) is affected when an investor who has made a loan to a Community Development Finance Institution (CDFI) receives value back from the CDFI during the 6 year period following the investment.

• Where a loan investor receives value (other than an insignificant amount) from the CDFI during the 6 year period, the investor is treated as having received a loan repayment equal to that value, reducing the invested amount accordingly.
• If value is received in the first or second year of the 6 year period, the deemed repayment is treated as made at the start of the second year; if received in a later year, it is treated as made at the start of that year.
• An amount of value is considered insignificant if it is £1,000 or less, or if it exceeds £1,000 but is insignificant relative to the average capital balance of the loan for the year in which the value is received.
• Value already accounted for through a previous reduction or withdrawal of CITR in respect of any loan, securities or shares is disregarded for the purposes of this section.

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