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HMRC internal manual

Community investment tax relief manual

HM Revenue & Customs
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Withdrawal of relief: When value is not received - meaning of “qualifying payment”

CTA2010/Part 7/Chapter 5/S249; ITA/s366

A receipt by an investor is not regarded as value received from a community development finance institution (CDFI) if it represents a qualifying payment, namely

  • reasonable payment for goods, services or facilities provided by the investor
  • payment of interest at reasonable commercial rates
  • payment of a company dividend or other distribution that does not exceed a normal return on investments of shares or securities in that company
  • payment for the acquisition of an asset at or below its market value
  • rental payments that do not exceed a reasonable commercial rate for the property
  • a payment in discharge of an ordinary trade debt.

An ordinary trade debt means a debt supplied in the ordinary course of business and whose credit period does not exceed six months (or does not exceed the period normally given to customers of the person carrying on the business).

The repayment of a loan by the CDFI is not regarded as involving receipt of value (see CITM7121).