Part 7 Community investment tax relief

Chapter 5 Withdrawal or reduction of CITR

Disposals

244 Disposal 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 under Chapter 2 of Part 7 of ITA 2007 before the disposal, and
(c) the disposal does not arise as a result of an event within section 249(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not a qualifying disposal, any CITR attributable to the former investment in respect of any accounting period must be withdrawn.
(3) If the disposal is a qualifying disposal, any CITR attributable to the former investment in respect of an accounting period 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(b) in any other case, be withdrawn.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 243).
(5) If in respect of any accounting period—
(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 period,
subsection (3)(a) has effect in relation to that period as if the amount or value referred to in subsection (3) were reduced by multiplying it by the fraction—
BC
(6) If the amount of CITR attributable to the former investment in respect of an accounting period 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 241 (attribution: bonus shares).