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HMRC internal manual

Community investment tax relief manual

Withdrawal of relief: Value received - shares or securities

CTA2010/Part 7/Chapter 5/S247; CTA2010/Part 7/Chapter 5/S252; ITA/s364, ITA/s369

Withdrawal of Relief

Where the investment eligible for relief under the CITR scheme consists of shares or securities relief is withdrawn if

  • the investor receives value (see CITM7060) from the community development finance institution (CDFI) during the six year period (the period of restriction) commencing one year before the investment date,
  • the investment (or part of it) is held by the investor when the value is received and has been held continuously by him as beneficial owner since it was made (this is known as the continuing investment), and
  • the aggregate amount of value received exceeds the permitted level or receipts relating to the continuing investment by an amount that is not insignificant.

The permitted level of receipts for each year is broadly equivalent to the permitted balances relating to loans (see CITM7050).

Timing of receipt of value within six year period of restriction Permitted Level of Receipts
Years 1, 2 & 3 No receipts are permitted
Year 4 Up to 25% of invested capital
Year 5 Up to 50% of invested capital
Year 6 Up to 75% of invested capital

An amount is regarded as being of insignificant value if it is less than £1,000 or (even if it is more than £1,000) if it is insignificant in the context of the amount subscribed for the securities or shares within the continuing investment. See CITM7100 for further commentary on receipts of insignificant value.

The relief to be withdrawn is that obtained for any tax year or period that is attributable to the continuing investment.

Where an investor has made more than one investment in a CDFI from which value is received the amount of value received is allocated across the investments held (see CITM7130).

Reduction of Relief

Where an investor receives value in respect of shares and securities but the amount of value received is within the permitted level of receipts, the tax relief relating to those investments is not withdrawn in full. But the value received does reduce the amount of relief available.

In such cases any tax relief due for the tax year or accounting period in which the value was received, or any later year or period, is reduced - the amount subscribed for the shares or securities comprising the continuing investment (see CITM6090) is treated as reduced by the amount of value received.


A company with an accounting date of 31 December each year subscribes £100,000 for shares in a CDFI on 1 January 2004. On 1 April 2007 it receives a loan of £30,000 from the same CDFI.

The loan from the CDFI represents value received. It is received during the fifth year of the six year period of restriction and is within the permitted level of receipts for that year.

The company is eligible for tax relief of £5,000 for the accounting periods ending 31 December 2004, 2005 & 2006.

But for the periods ending 31 December 2007 & 2008 the value received (£30,000) is treated as reducing the amount subscribed for the shares so the amount of relief available for those years is reduced to £3,500 (5% of £(100,000 - 30,000)