Income Tax Act 2007 section 257QF

The amount of value received

Section 257QF sets out how to calculate the amount of value an investor is treated as having received from a social enterprise, depending on the type of value received, for the purposes of social investment tax relief (SITR).

• The method for calculating value received depends on the nature of the benefit — for example, repayment of investments, discharge of liabilities, loans, goods or services at undervalue, or disposal of assets at undervalue.
• Where investments or debts are repaid or released, the value received is the amount the investor receives or, if greater, the market value of the investments or debt.
• Where goods, services, benefits or assets are provided, the value received is generally the arm's-length price or market value, less any amount actually paid by the investor.
• Where loans or advances are made to the investor, the value received is the loan or advance amount, reduced by any repayments made before the investment was made.