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EXCLUSIVE GUEST ARTICLE: Investing For Good - Impact Investing And New UK Tax Relief

Greg Moss, Bond Dickinson, Senior Wealth Advisor , 19 May 2015


A new form of tax relief is designed, proponents hope, to drive what is known as impact investing in the UK, but how effective will it be and how should investors approach it?

For social enterprises, the message is clear. SITR in its new expanded form has the potential to become a major source of funding.

Many will be keen to capitalise on what will be seen as an attractive new tax reducer, in an era where tax planning outside the mainstream is not for the faint hearted, not to mention high-risk from a reputational perspective.

For investors, particularly those with ethical and philanthropic goals, SITR products represent a new and intriguing option which sits somewhere between investment for profit and pure philanthropy. The fly in the ointment, at this stage, is the inability of advisors to determine where precisely on that spectrum they sit.

For now, on a precautionary basis, investors should probably be prepared to lose anything they throw at SITR qualifying investments, except the tax relief, and should certainly not rely on expected returns from such holdings to support their broader goals.

With that caveat established, many investors will still be very attracted to the prospect of diverting some of their wealth into organisations and causes with which they are genuinely engaged, through investment which is not only boosted by government subsidy but which has at least the potential to produce returns, which can then be ploughed back into similar endeavours in the future.

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