CITM4060 - Qualifying Investments: Tax Relief Certificates: Issue

SI2003/96 Regulation 14; FA02/SCH16/PARA12; ITA/s348

A Community Development Finance Institution (CDFI) must issue a tax relief certificate within thirty days of receiving an investment from an individual, a company or another CDFI.

The form of the tax relief certificates is specified by the Commissioners for HM Revenue & Customs. It can be accessed via the HMRC website, www.hmrc.gov.uk/specialist/citc_guidance.htm.

Any body that issues tax relief certificates on a fraudulent or negligent basis is liable to a maximum fine of £3,000.

Loans with drawdown facilities

Where the qualifying investment is a loan whose terms provide for amounts to be drawn down over a period of time (see CITM4020) the tax relief certificate must be issued within thirty days of the date on which the first amount is drawn down.

The amount of the investment to be reflected on the certificate is the total amount committed under the loan agreement. The certificate includes a check box that indicates whether the investment is a loan with a drawdown facility.

Subsequent drawdowns made under the terms of the same loan agreement do not necessitate the issue of further certificates.

Accreditation applied for before 6 April 2003

Where the investment is received before accreditation has been granted to the CDFI, but an application for accreditation is made before 6 April 2003, the tax relief certificates must be issued within 30 days of the grant of accreditation.