Income Tax Act 2007 section 257QO

Maximum relief not obtained for share issue

Section 257QO adjusts the calculation of SI relief withdrawal where the investor did not obtain the full amount of tax relief that was theoretically available on a share issue.

• This section applies where SI relief is being withdrawn under the repayment rules and the actual income tax reduction the investor received ("D") was less than the full amount available (the investment amount multiplied by the SI rate).
• Where the investor received less than the maximum relief, the amount subject to withdrawal ("A") is scaled down proportionally using the fraction D divided by (I × R).
• If SI relief was reduced before it was obtained (for example, due to insufficient tax liability), "D" is treated as the amount it would have been without that prior reduction, ensuring a fair calculation.
• This adjustment for prior reductions does not apply where the reduction arose from the attribution of SI relief following a corresponding issue of bonus shares.