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HMRC internal manual

Community investment tax relief manual

From
HM Revenue & Customs
Updated
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Tax Relief: Loss of Accreditation by the CDFI

CTA2010/Part 7/Chapter 4/S238; ITA/s356

An investor is not entitled to claim relief under the CITR scheme if the Community Development Finance Institution (CDFI) in which the investment is made ceases to be accredited within the five year period beginning on the day the investment is made (the ‘five year period’).

Accreditation lost within the first year of the five year period

Where the accreditation is lost within the first year of the five year period no claim to relief may be made in respect of the investment.

Accreditation lost during second or subsequent year of the five year period

Where accreditation is lost during the second or subsequent years of the five year period the tax years or accounting periods for which investors are not entitled to claim relief can be established as follows:

  1. Identify the last anniversary of the investment date to occur before the accreditation is lost.
  2. Identify in which accounting period or tax year that anniversary fell.
  3. No claim to relief may be made for that, or any later period or year.

Example

Investment made by an individual 1 June 2004
   
Loss of accreditation by CDFI 1 January 2007

 

The last anniversary of the investment before accreditation was lost is 1 June 2006. This falls within the tax year ending 5 April 2007 (2006/7), so no claim may be made for 2006/7, or any later tax year.