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HMRC internal manual

Community investment tax relief manual

Withdrawal of relief: When value is not received - repayment of loans

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

Loan repayments made by a community development finance institution (CDFI) to an investor are not regarded as a receipt of value in relation to any investment held, or made, by the investor.

This is the case whether the repayments relate to:

  • restricted, interim repayments within Years 3, 4 and 5 of a loan that is a qualifying investment (CITM4020), although in this case the repayments will reduce the invested amount of that loan on which relief may be claimed (CITM6090),
  • unrestricted repayment after the end of Year 5 of a loan that is a qualifying investment, or
  • a loan that is not a qualifying investment.

This means that:

  • where an investor has made a number of qualifying investments (loans) to the same CDFI (whether within the same year or accounting period or in different years or periods) the repayment of one loan will not affect the amount of relief available on others,
  • where an investor who received full repayment of a qualifying investment (loan) after the end of its five-year period makes a further investment in the same CDFI the amount of CITR available on the later investment is not compromised by the earlier repayment, and
  • an investor who makes a qualifying investment in CDFI can obtain full relief in respect of that investment without any reduction for repayments received from the CDFI in respect of loans made outside of the scheme.