The Social investment tax relief (SITR) scheme is a tax relief scheme to encourage individuals to support social enterprises and to assist social enterprises to access new sources of finance.
The lifetime maximum amount that social enterprises can raise through SITR is £1.5 million. This includes any money received by subsidiaries, former subsidiaries, or businesses that have been acquired.
Individuals making an eligible investment in a SITR of up to £1,000,000 can deduct 30% of the cost of their investment from their income tax liability for the relevant, later year in which the investment is made or the previous tax year. Qualifying investors can also benefit from Capital Gains Tax hold-over relief.
A Social enterprise must be a community interest company, a community benefit society with an asset lock, or a charity. For their investors to claim SITR, eligible social impact bond contractors need to be accredited by the Cabinet Office.
The scheme was due to end in April 2021 but was extended as part of the Spring Budget for a further 2 years until 5 April 2023.
Source: Informanagement