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Autumn Statement: social impact bonds receive tax boost

by Danielle Levy on Dec 05, 2013 at 12:55

Autumn Statement: social impact bonds receive tax boost

The government aims to stimulate investment in social enterprises with plans to provide tax relief on social impact bonds.

In the Autumn Statement the government said it would provide tax relief on investment in social impact bonds where the special purpose vehicle is structured as a company limited by shares.

'The government knows there is still more to do to improve the tax and legislative climate for social investment,' the Autumn Statement noted. 

As a result a road map for social investment is set to be published in January of next year, which will include seeking state aid clearance for a larger tax relief scheme, looking at options for supporting indirect investment and making changes to regulations for community interest companies to make them more attractive to investors and social organisations.

Threadneedle Investments chief executive Campbell Fleming (pictured), welcomes the development which should act as a boost to social investment. The fund manager launched a dedicated social bond fund in partnership with Big Issue Invest last week.

'We commend the chancellor’s social investment tax relief in today’s Autumn Statement,' Fleming said. 

'Having just launched a social bond fund with Big Issue Invest, we are pleased to see the government continuing to drive the revolution in social investment in the UK, encouraging individuals to invest in organisations that improve the lives of people and communities, and helping the sector become self-sustaining in the long term.'

Meanwhile ClearlySo, which helps social entrepreneurs raise capital from investors making direct social investments, applauded the news. 

The firm's head of invididual investor network, Mike Mompi, told Wealth Manager: '[The tax relief] sends a strong signal to the investment community and puts social impact investment on the map for many more HNWI and sophisticated investors than ever before.'

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