The government will work to develop a pilot social investment vehicle that will allow different groups of investors to pool money, according to the Cabinet Office response today to two reports on charity regulation.
"The Cabinet Office is working to scope the potential for a pilot social investment fund, designed to be easy, replicable and as low cost as possible," the response says.
The Cabinet Office response concerns Lord Hodgson’s statutory review of the Charities Act 2006: Trusted and Independent: Giving Charity Back to Charities, which was published last year, and The Role of the Charity Commission and "Public Benefit": Post-legislative Scrutiny of the Charities Act 2006, published earlier this year by the Public Administration Select Committee.
A social investment vehicle would in theory permit the pooling of investments from public organisations, charities, companies and individuals, all of which might have different legal and tax treatments, Hodgson said in his original report.
"Such a form would be a ready-made vehicle for social investment, facilitating the pooling of resources for such investment, providing a much simpler alternative to bespoke forms and so avoiding much of the significant legal and other professional up-front costs associated with them," Hodgson’s report said.
"Such a legal structure would need to reflect the rules on private benefit applicable to charities and maintain the different tax treatment."
The structure was initially proposed by Stephen Lloyd, a senior partner at the law firm Bates Wells & Braithwaite, who advised Hodgson on his report.
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