Income Tax Act 2007 section 357LDA

The existing investments requirement

Section 357LDA sets out the conditions that must be met regarding any shares or debentures an investor already holds in a social enterprise (or its qualifying subsidiary) before making a new investment that qualifies for Social Investment Tax Relief (SITR).

• Any shares or debentures already held by the investor in the social enterprise or its qualifying subsidiary must be either risk finance investments or permitted subscriber shares
• A risk finance investment is a share issued to, or debenture held by, the investor for which a compliance statement under section 205, 257ED or 257PB has been provided at some point
• Permitted subscriber shares are those continuously held by the investor since issue, or acquired when the issuing company had only issued subscriber shares and had not yet started or prepared for any trade or business
• The term "debenture" is defined broadly as any instrument that creates or acknowledges indebtedness, in line with section 257L(6)