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HMRC internal manual

Community investment tax relief manual

From
HM Revenue & Customs
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Tax Relief: Attribution

CTA2010/Part 7/Chapter 4/S240; ITA/s357

Where, within a single tax year or accounting period, an investor has made a number of different investments under the CITR scheme it may be necessary to be able to determine how the relief obtained is allocated, or attributed between those investments. This would also be necessary, for example, if there were a part disposal of an investment that had attracted relief.

The attribution rules work as follows:

Allocation Required Method of Allocation
Between two or more investments Allocate relief in proportion to invested amounts (see CITM6090).
Between shares (or securities) within the same issue Allocate the relief evenly across all the shares (or securities).
Between shares originally subscribed for and bonus shares issued in respect of the original shares Relief attributable to the original shares is attributed across the combined holding of bonus and original shares.
The CITR scheme rules then apply as if the original issue had included the bonus shares.    
  On withdrawal of relief attributable to a loan, or any securities or shares The relief attributable to that loan, or each of those securities or shares, is reduced to nil.
  On reduction of relief attributable to a loan or any securities or shares The relief attributable to that loan, or each of those securities or shares, is reduced by a proportionate part of that reduction.