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HMRC internal manual

Community investment tax relief manual

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HM Revenue & Customs
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Tax Relief: Corporate Investors - making and effect of claims - investments in accounting periods from 1 April 2013

Investments in accounting periods from 1 April 2013

CTA2010/Part 7/Chapter 1/S220A

Investments made in accounting periods commencing on or after 1 April 2013 have a measure of carry forward in the same way as that for individual investors.

If on reducing the tax liability to zero in any accounting period the company has been unable to use their full entitlement of 5% of the invested amount, the unused excess may be carried forward and set against later years, where capacity is available.

The carry forward of unused relief may not be made to a period subsequent to the 5 year claim period for the particular investment. Any unused relief at the end of the 5 year period is lost.

Example 1

A company invests £100,000 in a CDFI and is entitled to relief of £5,000 in each accounting period. In accounting period 3 it has made a loss and has no tax liability. In accounting period 4, before CITR, it has liability of £20,000. It can use the relief due plus that brought forward (£5,000 + £5,000) and reduce its liability to £10,000.

Example 2

A company invests £100,000 in a CDFI and is entitled to relief of £5,000 in each accounting period. In accounting period 4 it only has liability of £7,000 and so has excess relief of £3,000. In accounting period 5 it make s a loss and has no liability. The unused excess carried forward and the year 5 relief are therefore lost.