Tax Relief: Shares & securities: Disposal and receipt of value
CTA2010/Part 7/Chapter 4/S237; ITA/s355
Where the investment is shares or securities, no claim for relief under the CITR scheme can be made for any tax year or accounting period unless the investor has held the investment:
- as sole beneficial owner
continuously throughout the period
- beginning when the investment is made and
- ending immediately before the ‘qualifying date’ for the tax year or accounting period for which relief would be due
Receipt of Value
Investors are not entitled to claim relief for any tax year of accounting period if before the qualifying date for that year or period the investor has received value (see CITM7060) from the CDFI that exceeds prescribed limits (see CITM7080))
The ‘qualifying date’ for any tax year or accounting period is the next anniversary of the investment date to occur after the end of that year or period.
An individual subscribes £10,000 for shares in a CDFI on 1 June 2004.
The investor receives no value from the CDFI until 1 January 2007 at which time the investor receives value amounting to £3,000 from the CDFI.
1 January 2007 falls within the fourth year of the six year period of restriction (see CITM7090). The permitted level of receipts for that year is 25% of the invested capital (£10,000) (see CITM7080). So the permitted level of receipts is exceeded.
The next anniversary of the investment date to occur after the permitted limit was exceeded is 1 June 2007. This tax year which immediately precedes this date is 2006/7. 1 June 2007 is therefore the qualifying date for 2006/7.
No claim to relief may be made for 2006/7 (or any future period).