Income Tax Act 2007

CITR

333 Meaning of “CITR”

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

334 Eligibility for CITR

(1) An individual (“the investor”) who makes an investment (“the investment”) in a body is eligible for CITR in respect of the investment if—

(a) that body is accredited as a community development finance institution under Chapter 2 at the time the investment is made,

(b) the investment is a qualifying investment (see Chapter 3), and

(c) the general conditions of Chapter 4 are met.

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

335 Form and amount of CITR

(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 tax years.

(2) If the investor makes a claim for a relevant tax year, the investor is entitled to a tax reduction for that year of 5% of the invested amount in respect of the investment for the year.

(3) For this purpose the “relevant” tax years are—

(a) the tax year in which the investment date falls, and

(b) each of the 4 subsequent tax years.

(4) The tax reduction is given effect at Step 6 of the calculation in section 23.

(5) The investor is entitled to make a claim for CITR for a relevant tax year 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 348) relating to the investment from the CDFI,

but no claim may be made before the end of the tax year to which it relates.

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

(a) section 354 (loans: no claim after disposal or excessive repayments or receipts of value),

(b) section 355 (securities or shares: no claim after disposal or excessive receipts of value), and

(c) section 356 (no claim after loss of accreditation by CDFI).