SCHEDULES
SCHEDULE 16Community investment tax relief
Part 6Withdrawal of relief
I129Disposal of shares or securities during five year period
1
This paragraph applies where the investment consists of securities or shares and—
a
the investor disposes of the whole or any part of the investment (“the former investment”) within the five year period,
b
the CDFI has not ceased to be accredited before the disposal, and
c
the disposal does not arise by virtue of an event within paragraph 35(1)(a) (repayment, redemption or repurchase of securities or shares included in the investment).
2
If the disposal is not a qualifying disposal, any relief attributable to the former investment in respect of any tax year or accounting period must be withdrawn.
3
If the disposal is a qualifying disposal, any relief attributable to the former investment for a tax year or accounting period must—
a
if it is greater than an amount equal to 5% of the amount or value of the consideration (if any) which the investor receives for the former investment, be reduced by that amount, and
b
in any other case, be withdrawn.
4
For the purposes of this paragraph “qualifying disposal” means a disposal that is—
a
by way of a bargain made at arm’s length for full consideration, or
b
a permitted disposal (within the meaning of paragraph 28).
5
Where for any tax year or accounting period—
a
the amount of relief attributable to the former investment (“A”) is less than
b
the amount (“B”) which is equal to 5% of the invested amount in respect of the former investment for that year or period,
sub-paragraph (3)(a) shall have effect in relation to that year or period as if the amount or value referred to in that sub-paragraph were reduced by multiplying it by the fraction—
6
Where the amount of relief attributable to the former investment in respect of a tax year or accounting period has been reduced before the relief was obtained, the amount of relief attributable to that investment shall be deemed for the purposes of sub-paragraph (5) to be the amount of the relief that would have been attributable had no such reduction been made before the relief was obtained.
7
Sub-paragraph (6) does not apply to a reduction by virtue of paragraph 26(5) (attribution of relief where there is a corresponding issue of bonus shares).