What is the Community Investment Tax Relief Scheme?
The Community Investment Tax Relief (
CITR) scheme encourages investment in accredited intermediary organisations, called
Community Development Finance Institutions (CDFIs). The tax relief under the system is available to both individuals and companies.
CDFIs may take a range of forms, including:
• Community loan funds, which make capital available to community regeneration initiatives and businesses;
• Micro-finance funds, which make small loans, usually at near-market rates of interest, to the smallest businesses, e.g., sole traders and
• Social banks - profit-seeking financial service providers or subsidiaries dedicated to social or environmental objectives.
What’s The Aim of the Scheme?
The CITR scheme encourages investment in disadvantaged communities by giving tax relief to
investors who back businesses (and other not-for-profit enterprises) in underprivileged communities by providing additional tax relief. Tax relief of up to 5% per year is available for up to 5 years, starting with the year the investment is made. This provides a total tax relief of up to 25% of the invested amount.
How will the CITR Scheme help investors?
It was announced as part of the
Spring Budget measures that the amount CDFIs can provide to relevant investments would increase from £250,000 to £375,000 for non-profit organisations and from £100,000 to £250,000 for profit-distributing organisations. The enabling legislation came into force on 2 June 2023.
In addition, the amount accredited CDFIs can raise through
CITR increased from £10 million to £25 million for retail CDFIs and from £20 million to £100 million for wholesale CDFIs.
Contact Us
Suppose you’re looking at investing and gains tax relief through the CITR scheme. Contact our
Specialist tax team that can help you utilise this tax relief through your new investment.