Breakthrough for Social Investment Tax Relief (SITR)

As an experienced and enthusiastic adviser [IFA] in this area I am pleased to publish here an up to date piece from my friends at Worthstone that you may find useful . . . .

Philip Hammond announced the expansion of the Social Investment Tax Relief (SITR) scheme during his first
Autumn Statement today. Plans have now been made to increase investments into an SITR-qualifying social enterprise to £1.5m.

News of the expansion is a long-awaited and welcome addition to the social investment market, addressing a key issue of limited product flow.

From a survey of 42 financial advisers following the March 2016 Social Investment Academy, a ‘lack of appropriate product supply’ ranked the number 1 barrier when considering offering social investment advice [1].

With an increase now expected, this adds another piece to the puzzle that IFAs and wealth managers have been demanding.

Gavin Francis, Founder of Worthstone, a leading social investment consultancy to wealth advisers, has been looking to advance the scale of this scheme for over 3 years said “From the concept of SITR to the reality, we’ve been working towards this expansion, which we welcome as a clear signal from government to investors and a significant boost to the market.

Our IFA subscribers say that there is latent demand from clients and with the number of SITR funds set to grow, this will lead to increasing capital flows.

With over 20 pioneering firms having already advised clients on SITR investments, we believe this development provides the platform for an increasing number of investors and their advisers to deploy mainstream capital.

SITR was introduced in April 2014 and allows individual investors 30% tax relief on loans or equity investment made into social enterprises and charities. Previously, investment in a social enterprise was limited to €344,827 (about £293,000 [2]) over three years. In July 2016, NPC and Big Society Capital estimated that, in total, £3.4m has been invested in charities and social enterprises via SITR.

Currently, nearly two-thirds of individual investors who have invested into SITR funds were introduced by IFAs.

With the latest increase addressing a significant concern for IFAs and wealth managers, it will also be welcome news for mainstream product providers.”

Nick Morgan, Partner at Foresight, one of the leading tax efficient investment managers, said “This is one of the most interesting developments in the tax efficient space for five years and, as a leading manager of tax efficient products, we’ve been watching this opportunity develop with interest.

This expansion makes it much more compelling for us to consider offering SITR products in this progressive sector.”


[1] When compared to ‘carrying out due diligence’, ‘PI related concerns’, ‘lack of clarity around client suitability’ and ‘concern over FOS’.

[2] Assuming exchange rate of £1 = €1.16

Source:  worthstonelogo
My thanks to Gavin Francis : Click here to visit WorthStone

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