Income Tax Act 2007 section 364

Value received by investor during 6 year period: securities or shares

Section 364 deals with the withdrawal of Community Investment Tax Relief (CITR) when an investor who holds securities or shares in a CDFI receives value back from the CDFI during the six-year period following the investment.

• If an investor in CDFI securities or shares receives more than insignificant value back from the CDFI during the six-year period, and the amount exceeds permitted levels, CITR attributable to the continuing investment must be withdrawn
• No value at all (beyond insignificant amounts) may be received in the first three years; thereafter, cumulative receipts must not exceed 25% of invested capital before year five, 50% before the final year, or 75% before the end of the six-year period
• An amount of insignificant value is one that is £1,000 or less, or if more than £1,000, is insignificant relative to the amount originally subscribed for the securities or shares
• Value already accounted for through a previous reduction or withdrawal of CITR is disregarded, and separate rules in section 368 apply where the investor holds more than one investment