News & Thoughts

MARKET UPDATE: Breakthrough for Social Investment Tax Relief (SITR)

PRESS RELEASE – 23rd November 2016

London: Philip Hammond announced the expansion of the Social Investment Tax Relief (SITR) scheme during his first Autumn Statement today. Plans have now been made to increase investments into an SITR-qualifying social enterprise to £1.5m.

News of the expansion is a long-awaited and welcome addition to the social investment market, addressing a key issue of limited product flow. From a survey of 42 financial advisers following the March 2016 Social Investment Academy, a ‘lack of appropriate product supply’ ranked the number 1 barrier when considering offering social investment advice[1]. With an increase now expected, this adds another piece to the puzzle that IFAs and wealth managers have been demanding.

Gavin Francis, Founder of Worthstone, a leading social investment consultancy to wealth advisers, has been looking to advance the scale of this scheme for over 3 years said “From the concept of SITR to the reality, we’ve been working towards this expansion, which we welcome as a clear signal from government to investors and a significant boost to the market. Our IFA subscribers say that there is latent demand from clients and with the number of SITR funds set to grow, this will lead to increasing capital flows. With over 20 pioneering firms having already advised clients on SITR investments, we believe this development provides the platform for an increasing number of investors and their advisers to deploy mainstream capital.” 

SITR was introduced in April 2014 and allows individual investors 30% tax relief on loans or equity investment made into social enterprises and charities. Previously, investment in a social enterprise was limited to €344,827 (about £293,000[2]) over three years. In July 2016, NPC and Big Society Capital estimated that, in total, £3.4m has been invested in charities and social enterprises via SITR.

Currently, nearly two-thirds of individual investors who have invested into SITR funds were introduced by IFAs. One financial planner, Michael Smith, Director at Chamberlyns, observes “Having advised clients on SITR, this development offers a great step forward. With greater investment opportunity and availability, we’ll be better able to both help our clients to deploy some of their capital in accordance with their values via Social Investment, and deliver the high quality and personalised service we are known for. I would encourage fellow financial planners to build their expertise in this area, as in our view there will be a growing demand for advice around Social Investment and accordingly, we look forward to the Adviser Competency Training for social investment launching next year.”

With the latest increase addressing a significant concern for IFAs and wealth managers, it will also be welcome news for mainstream product providers. Nick Morgan, Partner at Foresight, one of the leading tax efficient investment managers, said “This is one of the most interesting developments in the tax efficient space for five years and, as a leading manager of tax efficient products, we’ve been watching this opportunity develop with interest. This expansion makes it much more compelling for us to consider offering SITR products in this progressive sector.”

[1] When compared to ‘carrying out due diligence’, ‘PI related concerns’, ‘lack of clarity around client suitability’ and ‘concern over FOS’.

[2] Assuming exchange rate of £1 = €1.16

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To read about an IFA’s experience of advising on SITR please click here.
To read about SITR’s track record so far please click here.

To view the slides presented by leading SITR tax adviser Neil Pearson, Mills & Reeve LLP,  at our recent Social Investment Academy on 2nd November please download them here. Please note: The slides are provided for information purposes only and are not intended to represent investment advice. Further advice should be sought before acting upon any information contained within this document.

Gavin Francis    Worthstone
Tel: 020 7183 6482

Michael Smith    Chamberlyns
Tel: 01582 434 256


Ben Thompson    Foresight Group LLP
Tel: 020 3667 8155

About the Social Investment Academy:

Hosted by Worthstone, the Social Investment Academy is the leading forum for retail social investment advisers, product providers and key market participants. The Academy brings these participants together and offers a unique, CPD accredited space to inform, discuss and develop the retail market. It has attracted participation from the City of London, Big Society Capital, FCA, FOS, HM Treasury and HMRC. Recent speakers at our event on 2nd November 2016 include Rupert Harrison MBE (former adviser to George Osborne), Rich Johnson (FCA), Peter Baxter (CEO of Panahpur) and Helene Pantelli from the Financial Ombudsman Service.

Visit our Website.

About Chamberlyns

Chamberlyns is recognised as one of the UK’s leading financial planning firms, providing a refreshingly different service for executives and professionals, who want to make the most of their money and the life that lies ahead of them. Chamberlyns exists to help clients make smart decisions about their money and remove the stresses, risks and time burden of handling complex financial matters on their own. In turn, this helps clients to have more and better choices, as well as the energy and freedom to focus on everything in their lives which is more interesting and important than their money.

About Foresight Group LLP (“Foresight”):

Foresight is a leading independent infrastructure and private equity investment manager which has been managing investment funds on behalf of institutions and retail clients for more than 30 years. Foresight has over £2.1 billion of Assets Under Management across a number of funds, including Listed Vehicles, Limited Partnerships, Enterprise Investment Schemes (EIS’s) and Venture Capital Trusts (VCT’s). Foresight is proud sponsor of Foresight Natural Energy, Conrad Colman’s Vendee Globe entry.  Colman is aiming to complete the non-stop solo circumnavigation without using any fossil fuels, instead relying on solar panels and a hydro generator to power electrics on the boat, stored in special Lithium Ion batteries. #crazykiwi

Visit their Website