Social investment tax relief

Social Enterprise Tax Relief is a new form of tax relief which was introduced on 6 April 2014 which will allow individuals to invest in Social Enterprise projects and claim certain income tax and captal gains tax reliefs.

The relief will apply to investments made between 6 April 2014 and 5 April 2019.

The relief will offer an income tax rebate to those making unsecured investments in asset locked bodies, i.e. Charities, Community Interest Companies and Community Benefit Societies and what is called Social Impact Bonds.

Social Enterprise income tax relief will be available from 6 April for organisations with a maximum number of 500 staff. Organisations will be able to receive up to £290,000 over three years under the scheme.

The individual investor will receive 30% tax relief of the amount invested in the Social Enterprise scheme – maximum income tax relief of £300K per annum.

Any gains or disposals of the Social Enterprise investment will be exempt from capital gains tax.

The relief is similar to the Enterprise Investment scheme and Venture Capital Trust but in particular will be available for debt as equity investments.