Commentary

C3.1912 Social investment tax relief—holdover relief

Capital gains tax
Capital gains tax | Commentary

C3.1912 Social investment tax relief—holdover relief

Capital gains tax | Commentary

Investments in social enterprises

C3.1912 Social investment tax relief—holdover relief

For the latest New Development, see ND.1893.

Social investment tax relief (SITR) is designed to support social enterprises seeking external finance by offering a range of tax reliefs to individual investors who invest in new shares or new qualifying debt investments in those social enterprises. The relief applies for investments made on or after 6 April 2014. The main provisions regarding the conditions relating to the social enterprise and the investors can be found in Division E3.9. For HMRC guidance, see the GOV.UK website.

There are two capital gains tax reliefs available. There is a holdover relief for gains reinvested in social enterprises, and a disposal relief (see C3.1913) where the investment is subsequently disposed of after a minimum period.

Conditions for SITR holdover relief

Holdover relief is available where an individual investor has a chargeable gain, he acquires one or more assets known as the social holding, he is entitled to the social investment income tax relief (see Division E3.9) on the consideration paid for the assets under ITA 2007, Pt 5B, and the five following conditions are also met1:

  1.  

    •     Condition A2 is that the gain accrues either on the disposal of any kind of asset, or under the business asset disposal relief (formerly entrepreneurs' relief) provisions in TCGA 1992, s 169N (see C3.1307), or when a chargeable event occurs on the disposal of the social holding because either the asset is cancelled, extinguished, redeemed or repaid, or any of

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