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HMRC internal manual

Community investment tax relief manual

Qualifying investments: Securities

CTA2010/Part 7/Chapter 2/S227; ITA/s346

There is no specific definition of “securities” within the CITR scheme. In the absence of any definition, and following Aberdeen Construction Group Ltd v CIR, 52TC281, security should be taken to include loan stock, whether secured on the company’s assets or not, for which a loan stock certificate of something similar has been issued.

For securities to be treated as a qualifying investments (CITM4010) under the CITR scheme they must satisfy two conditions.

Condition 1: Subscription and Payment

The securities must have been subscribed for wholly in cash and be fully paid for on the investment date.

Condition 2: Conversion and Redemption

The securities must not carry any present or future right to be redeemed within five years of the day the investment is made.

Neither must the securities carry any present or future rights that would allow them to be converted into, or exchanged for any loan, securities, shares or other rights that are redeemable within five years of the day the investment is made.