VCM91200 - CVS: investors and reliefs: investment relief: amount of

FA00/SCH15/PARA39

Investment relief consists of a reduction in the investing company’s corporation tax liability for the accounting period in which the shares were issued. Except as mentioned below, the amount of that reduction is 20% of the amount subscribed for the shares (exclusive of any incidental costs incurred) or, if that would exceed the corporation tax liability, such an amount as will reduce that liability to nil.

The only exception to this rule is where the company has received value (see VCM91300 onwards) from the company issuing the shares or a connected person. In such a case the reduction will be 20% of the amount of the subscription less the amount of value received. The latter amount will be notified to the company on the compliance certificate given on form CVS3.