The Community Investment Tax Relief (Accreditation of Community Development Finance Institutions) Regulations 2003

Withdrawal of accreditation

15.—(1) The Secretary of State must withdraw the CDFI’s accreditation—

(a) with effect from the time of the failure, where the CDFI fails to satisfy the terms of regulation 8;

(b) subject to paragraph (2), where the CDFI makes a direct or indirect investment in residential property from the investment fund; and

(c) subject to paragraph (3), where the CDFI fails to make an annual report within 12 months of the date on which it was due under paragraph (1) of regulation 13.

(2) Paragraph (1)(b) does not apply where—

(a) the CDFI can demonstrate that to the best of its knowledge and belief it had not invested in residential property, and

(b) the CDFI divested itself of the investment within three months of—

(i) the date it discovered that the investment was in residential property, or

(ii) the date of receipt of a notice from the Small Business Service that the investment is in residential property,

whichever is the earlier.

(3) Paragraph (1)(c) does not apply if in the opinion of the Investment Director the CDFI had reasonable excuse for failing to make an annual return.

(4) A withdrawal of an accreditation must be given by notice by the Secretary of State specifying the date from which accreditation is withdrawn and the reasons for the withdrawal.

(5) The CDFI must within 30 days of receiving notice under paragraph (4) of withdrawal of accreditation give notice to each of the investors to which it has issued a tax relief certificate in respect of investments made within the specified period stating that accreditation has been withdrawn and specifying the date from which accreditation is withdrawn.

(6) For the purpose of paragraph (5) “specified period” means the five years immediately preceding the date from which accreditation is withdrawn.