The issuer of a bond funding UK community projects is negotiating with the Inland Revenue to try and...
The issuer of a bond funding UK community projects is negotiating with the Inland Revenue to try and secure tax breaks for the product.
The Boost City and East London Employment Bond, issued by charitable industrial and provident society CityLife, is one of the UK's largest privately funded social investment initiatives. The bond aims to pump £50m into London's most deprived areas ' Hackney, Tower Hamlets and Newham ' creating up to 8,000 jobs for unemployed people, supporting existing small businesses, establishing up to 1,000 new businesses, regenerating housing and community facilities.
Anyone can invest in the bond, and the money is returned, interest free, when the bond matures in five years. Money is also leveraged from other sources, such as charitable organisations that match funding already raised for specific projects.
At the moment there is no tax relief for anyone investing in the bond. A tax break would be a considerable incentive to investors, the group believes.
The group is arguing that a gift of income forgone on an interest free capital loan to a charity does not attract tax relief, when the equivalent physical gift of cash does.
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