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Presentation from Duncan Milwain on social investment - in particular bonds.

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Duncan Milwain, Head of The Charity and Social Enterprise Group at Lupton Fawcett Lee and Priestley, spoke at Leeds Empties event on investment and empty homes on 20 March 2013.

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Presentation from Duncan Milwain on social investment - in particular bonds.

  1. 1. Community investment using bonds:a worthwhile supplement?March 2013Presented by Duncan MilwainDirector/Head of the Charity & Social Enterprise Group
  2. 2. What is a bond? • Longer term debt capital • Repayment with agreed amount over agreed time • Does not confer voting or ownership rights© Lupton Fawcett Lee & Priestley 2013
  3. 3. Advantages / disadvantages  Less risky to investor than shares  Flexible: can be issued by CLGs, CICs, Cooperative Societies and Benefit to Community Societies  Can also be issued by charities (unlike shares)  For wealthier individuals who wish to invest larger sums  Does not confer membership  No community engagement  Repayment required over pre-agreed schedule© Lupton Fawcett Lee & Priestley 2013
  4. 4. Predominance of shares. Why? • Community Shares Unit • Types of investor – Local Community Investor – Community of Interest Investor – Social Investor – Ethical Investor • 65% of community share investors more likely to be Guardian readers (Wessex Community Assets report 2010) - is there a branding issue? • http://allia.org.uk/ • http://greenpastures.net/invest© Lupton Fawcett Lee & Priestley 2013
  5. 5. Use of tax relief • Incentivisation • Community Investment Tax Relief (CITR) through Community Development Finance Institution (CDFI) available on loan stock (if wholly in cash and not redeemable for 5 years) • Relief at up to 25% on the investment in CDFI over 5 years© Lupton Fawcett Lee & Priestley 2013
  6. 6. Use of tax relief • Incentivisation • Community Investment Tax Relief (CITR) through Community Development Finance Institution (CDFI) available on loan stock (if wholly in cash and not redeemable for 5 years) • Relief at up to 25% on the investment in CDFI over 5 years© Lupton Fawcett Lee & Priestley 2013

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