Social Investment

Social Investment Tax Relief (SITR) is the government's personal tax relief for social investment which encourages individuals to support charities and social enterprises by helping them access new sources of finance. 

It aims to encourage private investors to support social enterprises, very often community interest care companies, that are run on a commercial basis. Individuals receive a 30% tax break when investing into an eligible organisation. In choosing our Strategic Partners, we look for those companies whose efforts really are making a difference to people’s lives at a national level. Our aim is to raise funds capable of creating social impact on a large, tangible scale. 

The SITR legislation, from an investor’s perspective, is similar to the Enterprise Investment Scheme, but an investor can commit to the underlying entity by way of loan (whilst for EIS, all investments have to be made by way of equity). Therefore, as well as being able to invest in SITR initiatives by way of equity shares, giving immediate income tax and CGT benefits as well as credit and Capital Gains tax deferral if losses are suffered, it is possible to invest in debt instruments such as loans.

This will be of great significance to advisers and their clients who are seeking a degree of capital protection, which will no longer be available following the 2017 Autumn Budget changes to EIS/SEIS/VCT. Although loans to SITR companies cannot be formally secured on assets such as property, they can benefit from being “asset-backed”. Thus, in addition to the initial 30% tax credit, investors can receive (taxable) coupons from their loans, with a lower risk ranking than pure equity investment.

We are working with a number of social enterprises to raise funds where investors can take advantage of the benefits of SITR and contribute to a positive social impact, the first of which is Young London Today.

To know about about the Adolescent Care SITR Fund, please click here .

"I invested in the Innvotec SEIS fund in 2013 and have been delighted with its performance over the past 4 years. Having got to know John M and the team who manage Innvotec, I find them approachable, responsive and full of integrity with an exceptional pre-investment approach. As an adjunct, I have also taken up an investor/mentor role with one of the invested FinTech businesses, which is incredibly stimulating and fulfilling. "
"I had been disappointed by the returns available through the conventional share investments – and more recently by the widely varying performance of VCTs. Investing through an SEIS/EIS hybrid fund provides access to both types of such businesses – and also ensures that the full tax advantages of such investment are maximised. I was attracted to Innvotec as a fund manager, both by virtue of its excellent track record in both EIS and SEIS funds, and the fact that its charges among are amongst the lowest in the sector. "
"As a retired plc director I had some knowledge of investment, but being relatively new to such early-stage businesses, I was also concerned about risk. The OION fund was therefore an ideal way to spread this risk across multiple businesses and sectors and still enjoy the exceptional levels of tax relief. In the first semi-annual report I was delighted to see the progress which of the achieved within the fund - and will be including the new hybrid fund within my investment portfolio for this tax year."
"As a retired city lawyer, I was looking for a tax efficient – but hands off – scheme which would enable me to achieve both deductibility at the point of investment, and avoidance of capital gains. I was also attracted to the opportunity to support and back emerging enterprises from their earliest stages. Fund administration and communication by Innvotec have been to a particularly high standard; compliance with HMRC rules is straightforward, and as part of a broader investment portfolio, managed SEIS funds have an important role to play. "
"As an architect running a busy partnership, I was looking for a way of investing within a scheme which offered both high potential growth, and commensurate tax efficiency. Innvotec – with one of the longest track records within its sector, and a consistent and high level published returns – seemed an immediate and obvious choice. "
"Together with colleagues, I have introduced a number of private clients to the Innvotec managed funds. A key element of our selection criteria is transparency. Both ourselves and our clients appreciate a firm whose product charging really does favour the private investor. We have become accustomed to good performance, a highly professional team and quality of service."