Qualifying investments: Meaning of “qualifying investment”
CTA2010/Part 7/Chapter 2/S225 and Chapter 6/Ss256 - 259; ITA/s344 and TIOPA2010/Schedule2/Paragraphs 51-54
Relief under the CITR scheme is only available in respect of qualifying investments in community development finance institutions (CDFIs).
An investment is a qualifying investment if -
the investment consists of:
- a loan that satisfies the conditions of CTA2010/Part 7/Chapter 2/S226 and ITA/s345 (CITM4020), or
- securities that satisfy the conditions of CTA2010/Part 7/Chapter 2/S227 and ITA/s346 (CITM4030), or
- shares that satisfy the conditions of CTA2010/Part 7/Chapter 2/S228 and ITA/s347 (CITM4040)
- the investor has received a valid tax relief certificate from the CDFI (CITM4060) and
- there are no arrangements concerning protection of the investor against risks relating to the investment (CTA2010/Part 7/Chapter 2/S228, ITA/s349 and CITM4050).
Alternative Finance Arrangements
For the purposes of CITR references to “loan” include certain Sharia’a-compliant financial products that in substance, but not in form, are equivalent to interest-bearing loans. These are treated as loans for the purposes of the scheme. See CITM4300 for details of the types of arrangement that qualify for this treatment, and how the CITR rules are modified when dealing with such arrangements.