C1Part 7Community investment tax relief
Chapter 6Withdrawal or reduction of CITR
Disposals
361Disposal of securities or shares during 5 year period
1
This section applies if 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 5 year period,
b
the CDFI has not ceased to be accredited before the disposal, and
c
the disposal does not arise as a result of an event within section 366(1)(a) (repayment, redemption or repurchase of securities or shares included in the investment).
2
If the disposal is not a qualifying disposal, any CITR attributable to the former investment in respect of any tax year must be withdrawn.
3
If the disposal is a qualifying disposal, any CITR attributable to the former investment F1in respect of a tax year must—
a
if it is greater than A, be reduced by A, and
b
in any other case, be withdrawn.
For this purpose “A” is an amount equal to 5% of the amount or value of the consideration (if any) which the investor receives for the former investment.
4
For the purposes of this section “qualifying disposal” means a disposal that is—
a
by way of a bargain made at arm's length, or
b
a permitted disposal (within the meaning of section 360).
5
If F2in respect of any tax year—
a
the amount of CITR attributable to the former investment (“B”) is less than
b
the amount (“C”) which is equal to 5% of the invested amount in respect of the former investment for that year,
subsection (3)(a) has effect in relation to that year as if the amount or value referred to in subsection (3) were reduced by multiplying it by the fraction—
6
If the amount of CITR attributable to the former investment in respect of a tax year has been reduced before the CITR is obtained, the amount referred to in subsection (5) as B is to be treated for the purposes of that subsection as the amount it would have been without that reduction.
7
Subsection (6) does not apply to a reduction by virtue of section 358 (attribution: bonus shares).
Pt. 7 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)