Withdrawal of relief: Manner of withdrawal
CTA2010/Part 7/Chapter 5/S255; ITA/s372
Relief obtained under the CITR scheme may have to be withdrawn or reduced if -
- the relief given was not due, or
the relief was due but later needs to be reduced or withdrawn because the investor:
- disposes of a loan within the five year period (CITM7010)
- disposes of shares of securities within the five year period (CITM7020)
- receives repayments of loan capital (CITM7050)
- receives value from the community development finance institution (CDFI) (CITM7060).
Where relief does need to be reduced or withdrawn it is achieved by making an assessment. In the case of an individual investor the assessment is to income tax. For a corporate investor the assessment is to corporation tax under Case VI of Schedule D. In either case the assessment is made for the tax year or accounting period in which the relief was given.
Because assessment includes self-assessment it is possible for the investor to effect the reduction or withdrawal by amendment of the relevant self-assessment return. Where the time limit for amending that return has passed an assessment is issued by the Inland Revenue.
But no assessment is made to recover relief from an individual because of events that occurred after the investor has died.
Cessation of ownership of an investment (whether a loan, shares or securities) by reason of the death of an investor is not regarded as a disposal. So where the investor is an individual the investor’s death would not trigger the recovery of any relief properly given for tax years preceding that in which the investor died.
Note: where value is received references to the investor and CDFI include references to persons connected with them (see CITM7140).