Income Tax Act 2007 section 257QC

Effect of the investor receiving value from the social enterprise

Section 257QC modifies the calculation of the reduction in SI relief when an investor receives value from the social enterprise, in cases where part of the investment is treated as having been made in the tax year before it was actually made.

• This section applies where the investor receives value from the social enterprise and part of the investment amount is treated as though it was made in the preceding tax year under the carry-back rules
• The value received must be split between the two tax years in proportion to the amount of SI relief obtained in each year, using the formula A/B
• For each apportioned amount, a separate calculation is performed as if independent investments had been made in each year, applying adjustments for less than maximum relief where relevant but ignoring multiple investment issue rules
• The two resulting amounts are added together to give the total amount by which SI relief is reduced