CITM3070 - Investment by community development finance institutions (CDFIs): Investments in non-profit-distributing enterprises

SI2003/96 Schedule 1(4)

Loans to, or equity investments in, non-profit-distributing enterprises for the purpose of funding community projects are not relevant investments for the purposes of SI2003/96 Regulation 8 (see CITM3030) while (if and for so long as) the total amount invested in that enterprise as a consequence of the investment exceeds £375,000 from 2 June 2023 (£250,000 to 1 June 2023).

Community projects are:

  • public sector projects, or
  • projects benefiting charities and other non-profit-distributing bodies which are engaged in public function, or
  • small-scale projects of a purely local nature (even though the service provider may receive remuneration and competition for their supply).

Where the limit £375,000 on or after 2 June 2023 (£250,000 to 1 June 2023) is breached

  • as a result of two or more loans or equity investments being made on the same day, or
  • in circumstances where it is not possible to establish which loan or investment caused the limit to be exceeded,

the Director of Business Frameworks at the Department for Business and TRade (DBT) Economics & Markets Directorate determines which of those loans or investments are not to be treated as relevant investments. The determination seeks to minimise the amount of those investments that are not relevant investments.

Companies registered as community interest companies (CICs) are regarded as non-profit-distributing enterprises for the purposes of CITR.