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Social Investment Tax Relief


Much as we might like it, when it comes to investment we can’t have our cake and eat it.  However, if you are someone who would like to see a positive social return, as well a financial return on your money, then you may wish to consider Social Investing. For some investors social investing can be a compelling alternative to philanthropy as a way of deploying some of their money to achieve social ends.

Social enterprises are usually small with little or no previous track record and investments in them are illiquid and unregulated, so they are inherently risky. As such these don’t meet our criteria to be suitable as core investments of a portfolio and they certainly won’t be appropriate for everyone.

For some social investing you can also now enjoy tax relief. Social Investment Tax Relief (SITR) was introduced in April 2014 and allows individual investors 30% tax relief (and capital gains tax relief) on qualifying investments in social enterprises, charities, social impact bonds and social venture capital trusts. The investment has to be made for a minimum of three years. An individual can invest up to £1,000,000 (but the enterprise can only accept a maximum of £250,000).

In July 2016, NPC working for Big Society Capital estimated that, in total, £3.4m has been invested in charities and social enterprises via SITR so far. So it is off the ground but we expect much more in the future.

You may not be familiar with these types of investments so here are a few links to follow to find out some more about this growing area. Some are funds and some are direct investments in specific projects.  Please note that we are not making any investment recommendations here:

Big Society Capital



Investors often like to invest in social enterprises with which they have a personal or geographical interest. Many of the current investment opportunities have been developing in the South East and Bristol, there are fewer in the North. But here is an example of one in Leeds (although this one is not eligible for SITR),

Leeds Community Homes.


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