Income Tax Act 2007 section 257MM

Requirement to use money raised and to trade for minimum period

Section 257MM sets out the rules governing how a social enterprise must use the money raised through Social Investment Tax Relief (SITR) and the minimum period for which the relevant trade must have been carried on.

• The investment must be wholly employed for the funded purpose within 28 months of the investment date (or 24 months for accredited social impact contractors)
• The chosen trade must have been carried on for at least 4 months ending at or after the investment date, by the social enterprise or its 90% social subsidiary and by no other person
• Using the money to acquire shares or stock in a body, or to repay a loan, does not count as employing the money for the funded purpose
• The 4-month trading requirement may be shortened where the enterprise is wound up, dissolved, or enters administration or receivership for genuine commercial reasons unconnected with tax avoidance

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