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CTA2010/Part 7/Chapter 5/S251; ITA/s368

Where

• an investor has more than one investment in a community development finance institution (CDFI) for which the investor has obtained relief under the CITR scheme, and
• value is received within the periods of restriction of more than one investment

then the amount of value received is allocated across the various investments in a manner that reflects the relative sizes of those investments.

»Ê¹ÚÌåÓýapp amount of value received that is attributable to each investment is calculated by multiplying the total amount of value received by the fraction

A ÷ B

where

A is the “appropriate amount� of the investment, and

B is the aggregate of the appropriate amounts of the other investment(s)

»Ê¹ÚÌåÓýapp appropriate amount for each type of investment is determined as follows.

Loans

Value received in first two years of period of restriction - Average capital balance of loan for second year of period of restriction

Value received in third or later year of period of restriction - Average capital balance of loan for year of receipt

Shares or Securities

Value received in first year of period of restriction - Amount subscribed for shares or securities

Value received in second or later year of period of - Amount subscribed for those shares or securities that are still held at
restriction the time the value is received

Example

An investor makes two investments in a CDFI -

• a loan for £10,000 made on 1 January 2016. No amounts are repaid during the first five years of the loan
• £30,000 is subscribed for shares in the CDFI on 1 July 2016

On 1 January 2016 the investor acquires a car from the CDFI for £1,000. At the time is acquired the market value of the car is £5,000.

At the time the car is acquired the investor is treated as receiving value of £4,000 (the difference between the market value of the car and the consideration given for it). This is allocated across the two investments as follows:

• Loan £1,000 (£4000 x £10,000/(£10,000 + £30,000)
• Shares £3,000 (£4000 x £30,000/(£10,000 + £30,000))

Where the value received directly relates to a repayment, repurchase or redemption of shares or securities no allocation is required.