News & Thoughts

SITR – meet your client’s needs

Social Investment Tax Relief (SITR) has the potential to become a game changer for the thought leading financial planner looking to grow their High Net Worth client base and develop referrals from professional connections.

  • HMRC statistics tell us that the number of higher rate taxpayers in the UK has doubled in the past ten years to 4.4million (2013/14)
  • Many of these individuals have fully utilised their annual pension and ISA allowances.
  • SITR is a tax reducer and social impact lever and meets a significant need for those clients who are seeking new ways to plan with tax efficiency.

…so could Social Investment Tax Relief provide the “next tax efficient opportunity”?
Top tier financial planners have highlighted a significant planning opportunity for SITR in that the ability to defer Capital Gains Tax lends itself to those who have recently benefited from a liquidity event, triggering a significant capital gain. This may be of particular relevance where a lifetime cash flow has demonstrated that clients already have their core planning needs met, and they may be seeking other ways to deploy their wealth.

Advisers tell us that these individuals may already be donors to particular charities or may be ready to give money away – but they may wish to support a particular social need in the knowledge that money can be recycled thereby compounding the social impact.

Being able to advise on SITR:

  • Provides advisers with an opportunity for competitive advantage and differentiation. It helps attract client assets in a crowded marketplace
  • Enhances an adviser’s position as being someone at the forefront of financial planning
  • Removes the threat of clients hearing about this from another source
  • Adds value for fee charging advisers.

This gives you an opportunity to demonstrate you are worth your fee in tax saved. To do this well the financial planner needs to start by identifying the client’s needs.