Income Tax Act 2007 section 363

Value received by investor during 6 year period: loans

Section 363 explains how Community Investment Tax Relief is adjusted when an investor who has made a loan to a CDFI receives value back from that CDFI during the six-year period following the investment, and that value is not insignificant.

• When an investor receives non-insignificant value from a CDFI during the six-year period, that value is treated as a repayment of the loan, reducing the invested amount and triggering the same consequences as a standard loan repayment.
• If the value is received in the first or second year of the six-year period, the deemed repayment is treated as occurring at the start of the second year; if received in a later year, it is treated as occurring at the start of that year.
• Value is "insignificant" if it is no more than £1,000, or — where it exceeds £1,000 — if it is insignificant relative to the average capital balance of the loan for the year in which it is received.
• Value already accounted for through a previous reduction or withdrawal of CITR is ignored, and separate rules apply where the investor holds more than one investment in the same CDFI.