Income Tax Act 2007 section 257N

Attribution of SI relief to investments

Section 257N explains how Social Investment (SI) income tax relief is tracked back to specific investments, which becomes important when an investor later disposes of some but not all of their investments.

• When an income tax reduction arises from a single investment, the relief is attributed to that investment; when it arises from multiple investments, the relief is apportioned between them in proportion to the amounts claimed
• A "distinct investment" is an investment made on a single day in either a single share or qualifying debt investment, or in multiple shares or debt investments of the same class in the same social enterprise
• If bonus shares of the same class and rights are issued in respect of original shares carrying SI relief, the relief is spread proportionately across both the original and bonus shares, and the bonus shares are treated as issued on the same date as the originals
• Where part of an investment is treated under section 257JA as having been made in a previous tax year, the investment is split into two separate investments for attribution purposes, with shares or investments only regarded as the same class if they would be so treated on a recognised stock exchange

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