Section 361 | Disposal of securities or shares during 5 year period

(1)This section applies if the investment consists of securities or shares and—

(a)the investor disposes of the whole or any part of the investment (“the former investment”) within the 5 year period,

(b)the CDFI has not ceased to be accredited before the disposal, and

(c)the disposal does not arise as a result of an event within section 366(1)(a) (repayment, redemption or repurchase of securities or shares included in the investment).

(2)If the disposal is not a qualifying disposal, any CITR attributable to the former investment in respect of any tax year must be withdrawn.

(3)Subsections (3A) to (3H) apply if—^F1

(a)the disposal is a qualifying disposal, and^F1

(b)the investor has made a claim under section 335 in respect of the former investment for a tax year (“tax year X”).^F1

(3A)Subsection (3B) applies if the total of the following CITR does not exceed A—^F1

(a)any CITR attributable to the former investment in respect of tax year X given under section 335, and^F1

(b)any CITR attributable to the former investment in respect of later tax years given under section 335A where tax year X is the tax year mentioned in section 335A(1)(a).^F1

(3B)All CITR falling within subsection (3A)(a) or (b) must be withdrawn.^F1

(3C)If the total of the CITR falling within subsection (3A)(a) or (b) exceeds A, that total must be reduced by A.^F1

(3D)For the purposes of subsection (3C) CITR given in a later tax year must be reduced before CITR given in an earlier tax year.^F1

(3E)For the purposes of subsections (3A) and (3C) “A” is an amount equal to 5% of the amount or value of the consideration (if any) which the investor receives for the former investment.^F1

(3F)If—^F1

(a)the total of the CITR falling within subsection (3A)(a) or (b)(“B”) is less than^F1

(b)the amount (“C”) which is equal to 5% of the invested amount in respect of the former investment for tax year X,^F1

“A” is to be reduced by multiplying it by the fraction—

(3G)If the amount of CITR attributable to the former investment in respect of a tax year has been reduced before the CITR is obtained, the amount referred to in subsection (3F) as B is to be treated for the purposes of that subsection as the amount it would have been without the reduction.^F1

(3H)Subsection (3G) does not apply to a reduction by virtue of section 358 (attribution: bonus shares).^F1

(4)For the purposes of this section “qualifying disposal” means a disposal that is—

(a)by way of a bargain made at arm's length, or

(b)a permitted disposal (within the meaning of section 360).

(5)Repealed^F2

(6)Repealed^F2

(7)Repealed^F2