Finance Act 2002

Determination of “the invested amount”

21 (1) This paragraph applies for the purpose of determining “the invested amount” in respect of any loan, securities or shares comprised in the investment.

This is subject to paragraphs 31(2) and 38 (which adjust “the invested amount” in certain cases where value is received).

(2) In the case of a loan, the invested amount is—

(a) for the tax year or accounting period in which the investment date falls, the average capital balance for the first year of the five year period;

(b) for the tax year or accounting period in which the first anniversary of the investment date falls, the average capital balance for the second year of the five year period;

(c) for any subsequent tax year or accounting period—

(i) the average capital balance for the period of one year beginning with the anniversary of the investment date falling in the tax year or accounting period concerned, or

(ii) if less, the average capital balance for the period of six months beginning eighteen months after the investment date.

(3) In the case of securities or shares, the invested amount for a tax year or accounting period is the amount subscribed by the investor for the securities or shares.

(4) For the purposes of this paragraph, the average capital balance of the loan for a period is the mean of the daily balances of capital outstanding during the period.