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HMRC internal manual

Community investment tax relief manual

General conditions applying to investors and investments: Tax avoidance

CTA2010/Part 7/Chapter 3/S235; ITA/s353

Tax relief under the CITR scheme is not available in respect of any investment that is made as part of a scheme or arrangement whose main purposes include the avoidance of tax.

The reduction of an investor’s tax liability which flows from the schemes in the circumstances intended by Parliament is obviously not a tax advantage at which this rule is aimed. So it is not necessary to judge whether an investment would have been made if it had not attracted relief.

The scope of the provision cannot be described precisely, but it may apply in any situation where there are grounds for thinking that the circumstances are not ones in which Parliament intended the relief to be available.

Before any case is challenged solely on these grounds a report should be made to CT&VAT.