Income Tax Act 2007 section 353

No tax avoidance purpose

Section 353 prevents community investment tax relief (CITR) from being claimed where the investment is made as part of a tax avoidance scheme or arrangement.

• An investment will not qualify for CITR if it forms part of a scheme or arrangement designed to avoid tax.
• The test is whether tax avoidance is the main purpose, or one of the main purposes, of the scheme or arrangement.
• This anti-avoidance rule mirrors equivalent provisions found elsewhere in the Income Tax Act 2007 for the enterprise investment scheme and venture capital trusts.
• Even if all other conditions for CITR are met, relief will be denied if the investment is tainted by a tax avoidance purpose.