Income Tax Act 2007

337 Determination of “the invested amount”

(1) This section applies for the purpose of determining “the invested amount” in respect of any loan, securities or shares included in the investment.

This is subject to sections 363(2) and 369 (which adjust “the invested amount” in certain cases where value is received).

(2) In the case of a loan, the invested amount is—

(a) for the tax year in which the investment date falls, the average capital balance for the first year of the 5 year period,

(b) for the next tax year, the average capital balance for the second year of the 5 year period, and

(c) for any subsequent tax year—

(i) the average capital balance for the period of 12 months beginning with the anniversary of the investment date falling in the tax year concerned, or

(ii) if less, the average capital balance for the period of 6 months beginning 18 months after the investment date.

(3) In the case of securities or shares, the invested amount for a tax year is the amount subscribed by the investor for the securities or shares.

(4) For the purposes of this section, the average capital balance of the loan for a period is the mean of the daily balances of capital outstanding during the period.