A Tax relief to boost the development of social economy
The British Department of Treasury and Business has recently proposed a tax relief for social investment, which aims at developing innovation and skills in this sector. The prime minister, David Cameron, has welcomed this proposal and it has been presented on June 6th at the Social Impact Investment Conference.
This measure is expected to generate £500 million over the next five years and it is based on the idea of emulating as far as possible the existing tax relief for investors. It would cover investments of up to £1 million a year and claim back up to 30% of their investment against their income or capital gains tax liabilities. Gains on disposals of investments would be tax-free and the investment would allow a rollover from year to year.
This relief would be only open to organizations with less than 250 employees and a limit asset amount or turnover. During the consultation, moreover, it has been asked that the relief would concern only unsecured debt loans with no preferential rights, though excluding many existing investments to charities. The consultation runs until September 6th.