Last updated on:
March 17, 2024
Social Investment Tax Relief (SITR) is an attractive incentive for individuals looking to contribute positively to society through their investments. It targets investments in social enterprises and charities, allowing you to support impactful causes while benefiting from significant tax reliefs.
Key Benefits of Investing under SITR:
- Income Tax Relief of 30%: This benefit applies to the total amount invested, whether in shares or debt investments, offering a substantial reduction in your tax bill.
- Capital Gains Tax Exemption: Investments in shares (not applicable to loans) qualify for a 0% Capital Gains Tax rate, offering a clear path to tax-efficient growth.
- Capital Loss Relief: This relief is available for share investments, providing a safety net if the investment does not perform as expected.
- Inheritance Tax Exemption: Shares held for at least two years are exempt from Inheritance Tax, potentially providing significant savings for your estate.
- CGT Deferral: Reinvesting a capital gain into SITR-eligible shares allows you to defer the CGT due, enhancing the tax efficiency of your investment portfolio.
SITR stands alongside other tax-efficient investment schemes in the UK such as SEIS, EIS, VCT, CITR, ISA, and SIPP, each designed to encourage investments in various sectors while offering tax advantages.
Investing in social enterprises not only provides financial returns but also contributes to meaningful social change.
