Individuals may make an eligible investment and deduct 30% of the cost of their investment from their income tax liability, either for the tax year in which the investment is made or the previous tax year.
The investment must be held for a minimum period of 3 years for the relief to be retained. If individuals have chargeable gains in that tax year, they can also defer their capital gains tax (CGT) liability if they invest their gain in a qualifying social investment.
Tax will instead be payable when the social investment is sold or redeemed. They also pay no CGT on any gain on the investment itself, but they must pay income tax in the normal way on any dividends or interest on the investment.
Social investment tax relief gives rise to tax relief for social investment which is intended to promote investment in social enterprises and help to provide funding.
There are a variety of criteria that determine qualification for the investor so do please seek our advise with regard to any such investment.