SCHEDULES
C1SCHEDULE 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 F1... accounting period must be withdrawn.
3
If the disposal is a qualifying disposal, any relief attributable to the former investment for F2an 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in any other case, be withdrawn.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 F3... 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 F4that period,
sub-paragraph (3)(a) shall have effect in relation to F4that 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 F5an 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).
Sch. 16 modified by 2005 c. 7, s. 54A (as inserted (10.7.2008) by The Alternative Finance Arrangements (Community Investment Tax Relief) Order 2008 (S.I. 2008/1821), arts. 1, 2)