Income Tax Act 2007 section 365

Receipts of insignificant value to be added together

Section 365 requires small amounts of value received by an investor from a Community Development Finance Institution (CDFI) to be aggregated, so that individually insignificant receipts cannot be used to avoid the rules on withdrawal or reduction of Community Investment Tax Relief (CITR).

• Where an investor receives value from a CDFI during the six-year investment period, any earlier receipts of insignificant value received during that period must be added to the current receipt to determine the total value received.
• If the combined total exceeds the insignificant threshold, the investor is treated as having received the entire aggregated amount at the time of the latest receipt, triggering the usual consequences for CITR withdrawal or reduction.
• A receipt counts as "insignificant" if it is no more than £1,000 or, where it exceeds £1,000, it is insignificant relative to a benchmark amount — which is the average capital balance of a loan or the subscription price of shares or securities, depending on the type of investment.
• Once a small receipt has already been included in a previous aggregation that breached the insignificant threshold, it cannot be counted again in any later aggregation exercise.