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The UK is to increase the lifetime investment limit for social enterprises to benefit from tax relief to GBP1.5m (USD1.82m) from the current three-year rolling limit of EUR344,000 (USD368,000).
The new limit will apply to social enterprise that receive their first investment within 7 years of their first commercial sale. According to the Budget document, the current limit will continue to apply to older social enterprises.
Other Social Investment Tax Relief (SITR) changes announced in the Budget include:
The changes, which were first announced at Autumn Statement 2016, will take effect for investments made on or after April 6, 2017.
Social Investment Tax Relief (SITR) was introduced in 2014 to encourage individuals to invest in certain social enterprises carrying out higher risk trading activities. Individual investors are eligible for a range of tax reliefs including income tax relief of 30 percent on their investment.
SITR is currently a de minimis state aid scheme and restricts the amount of investments a social enterprise may raise under the scheme over a three-year rolling period. The Government announced at Autumn Statement 2014 that the limit would be raised, subject to state aid approval.
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