Tax reliefs have annual limits
A minority stake in your business
Social enterprises (i.e. community interest companies, registered charities and community benefit societies) who meet the eligibility criteria
Social investment tax relief (SITR) is a government scheme that incentivises private investment in social enterprises (i.e. businesses that generate a positive social impact). The rules for both investor and social enterprise are similar to those for Enterprise Investment Scheme (EIS).
The government introduced Social investment tax relief (SITR) in 2014. At the time, private individuals investing risk capital into early-stage mainstream businesses were already benefiting from the EIS and SEIS schemes, so SITR was seen as a way of levelling the playing field for social enterprises. The government defines social enterprises for SITR purposes as:
In line with the eligibility rules for EIS, your business might be eligible for a SITR investment (along with advice and support) if:
The maximum amount of investment allowed the lifetime of your enterprise is £1.5m. Any investments under SITR will also count towards limits on further investments through government venture capital schemes (i.e. EIS, SEIS and VCT).
The tax reliefs for individual investors are similar to those available via the Enterprise Investment Scheme (EIS) and include income tax relief (30% of the value of the investment up to £1m total investment per tax year.
You can find more information on the HMRC website under SITR.
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