Income Tax Act 2007 section 354

Loans: no claim after disposal or excessive repayments or receipts of value

Section 354 prevents a community investment tax relief claim being made for a tax year where the investment is a loan and certain disqualifying events have occurred before the relevant qualifying date.

• No claim may be made if the investor disposes of all or part of the loan before the qualifying date for the relevant tax year (though normal loan repayments are disregarded when assessing whether a disposal has taken place).
• No claim may be made if, after the investment is made but before the qualifying date, the outstanding capital on the loan has been reduced to nil.
• No claim may be made if, before the qualifying date, loan repayments during the five-year period have exceeded the permitted limits, whether through actual repayments or through receipts of value that are treated as repayments.
• The qualifying date for any tax year is defined as the next anniversary of the original investment date that falls after the end of that tax year.