Section 354 — Income Tax Act 2007: Loans: no claim after disposal or excessive repayments or receipts of value

Loans: no claim after disposal or excessive repayments or receipts of value 354 1 If the investment consists of a loan, no claim may be made in respect of a tax year if—

a the investor disposes of the whole or any part of the loan before the qualifying date relating to that year, b at any time after the investment is made but before that qualifying date, the amount of the capital outstanding on the loan is reduced to nil, or c before that qualifying date, paragraphs (a) and (b) of section 362(1) (repayments of loan in 5 year period exceeding permitted limits) apply in relation to the investment (whether by virtue of section 363 (receipts of value treated as repayments) or otherwise).

2 For the purposes of subsection (1)(a) any repayment of the loan is to be ignored.

3 For the purposes of this section the qualifying date relating to a tax year is the next anniversary of the investment date to occur after the end of that year.