Corporation Tax Act 2010 (c. 4)

Part 7 U.K. Community investment tax relief

Chapter 1 U.K. Introduction

CITR U.K.

218 Meaning of “CITR” U.K.

This Part provides for community investment tax relief (“CITR”), that is, entitlement to tax reductions in respect of amounts invested by companies in community development finance institutions.

219 Eligibility for CITR U.K.

(1) A company (“the investor”) which makes an investment (“the investment”) in a body is eligible for CITR in respect of the investment if—

(a) at the time the investment is made the body is accredited as a community development finance institution under Chapter 2 of Part 7 of ITA 2007,

(b) the investment is a qualifying investment (see Chapter 2 of this Part), and

(c) the general conditions of Chapter 3 of this Part are met.

(2) In this Part references to “the CDFI” are to the body in which the investment is made.

220 Form and amount of CITR U.K.

(1) If the investor is eligible for CITR in respect of the investment, the investor may make a claim in respect of the investment for any one or more of the relevant accounting periods.

(2) If the investor makes a claim for a relevant accounting period, the investor is entitled to a reduction in the amount of its liability for corporation tax for that period.

(3) The amount of that reduction for the relevant accounting period is the smaller of the following amounts—

(a) 5% of the invested amount in respect of the investment for the period, and

(b) the amount which reduces the investor's liability for corporation tax for the period to nil.

(4) For this purpose the “relevant” accounting periods are—

(a) the accounting period in which the investment date falls, and

(b) each of the accounting periods in which the subsequent 4 anniversaries of that date fall.

(5) The investor is entitled to make a claim for CITR for a relevant accounting period if—

(a) the investor considers that the conditions for the CITR are for the time being met, and

(b) the investor has received a tax relief certificate (see section 229) relating to the investment from the CDFI,

but a claim may not be made before the end of the accounting period to which the claim relates.

(6) Subsection (5) is subject to the following provisions—

(a) section 236 (loans: no claim after disposal or excessive repayments or receipts of value),

(b) section 237 (securities or shares: no claim after disposal or excessive receipts of value),

(c) section 238 (no claim after loss of accreditation by the CDFI), and

(d) section 239 (accreditation of investor).