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HMRC internal manual

Community investment tax relief manual

Restructuring of community development finance institutions (CDFIs): Rights issues


The normal share reorganisation rules on rights issues in TCGA92/S126 - S130 (see CG51805) are disapplied where -

  • there is a rights issue affecting shares in a corporate CDFI that have been held continuously since their issue by an investor and
  • either the original holding of shares, or the shares or debentures allotted in respect of those shares, have community investment tax relief attributed to them immediately following the rights issue.

The effect is that the investor is treated as having acquired the new shares or debentures at the time of the rights issue and for the amount of the consideration given at that time.

Note that TCGA92/S127-130 are only disapplied where the allotment of new shares or debentures is made in return for payment. They are not disapplied where the new allotment involves a bonus issue of shares.