We’ve tried to anticipate any questions you might have about Gen Community and our projects. If your query isn’t answered in our FAQs, contact us and we’ll get back to you as soon as we can.
To develop new social impact projects, funded with community share issues and loan instruments from Big Society Intermediaries.
- As with all projects, the manager has to choose a competent, reliable EPC (Energy, Procurement and Construction) contractor. A risk is that the EPC contractor does not perform to contract or expectations.
- If the sun shine levels are lower than expected the forecasted returns might be lower.
- The solar PV equipment does not perform to expectations.
- Insurances, warranties and manufacturer, insurance backed guarantees are in place to de-risk the investment as much as possible.
- The Financial Services Compensation Scheme does not protect member’s funds.
The Enterprise Investment Scheme (EIS) is a government scheme that provides a range of tax reliefs for investors who subscribe for qualifying shares in qualifying companies. There are five current EIS tax reliefs available to investors in companies qualifying under the EIS.
As with any tax matter, you should seek the advice of a qualified professional.
A summary of the benefits is as follows:
- Income tax – reduction of income tax liability by up to 30% of the amount invested, if qualifying EIS investment is held for no less than three years from the date of issue. Hence, for every 100p invested you would recieve a tax relief of 30p.
- CGT freedom – no ‘capital gains tax’ is payable on the disposal of shares after three years, provided the EIS initial income tax relief was given.
- IHT Relief – ‘Inheritance Tax’ – Shares in EIS qualifying companies will generally qualify for Business Property Relief for Inheritance Tax purposes at rates of up to 100% after two years of holding such investment, so that any liability for Inheritance Tax is reduced or eliminated in respect of such shares.
- CGT Deferral Relief – Tax on capital gains realised on a different asset can be deferred for as long as the EIS qualifying shares are held or even indefinitely, where disposal of that asset was less than 36 months before the date of the issue of shares in the EIS investment or less than 12 months after it.
- Loss Relief – If EIS shares are disposed of at any time at a loss (after taking into account income tax relief), such loss can be set against the investor’s capital gains, or his income in the year of disposal or the previous year.
Gen Community adheres to EIS legislation and compiles company information for a designated tax inspectorate. The society will then receive sufficient EIS3 forms for all eligible investors. The society will fill out company related information. Once investors receive their EIS3 form, It is then up to the individual to complete the EIS tax relief section on their self-assessment, or hand over the information to their tax advisor.
The return will be less than predicted if the sun shines for fewer hours. However, there is an allowance for annual variation in the projections. The proposed interest payment will be set by the board.
Yes, as long as the maximum “A” share holding isn’t reached per member. The limit is £20,000 per member per Industrial and Provident Society for “A” shares. If members are certified High Net Worth Individuals or sophisticated investors they may invest amounts over £20,000 in a “B” share class.
All shares in the society are ordinary shares with a nominal value of one pound each. Each share issuance is independent from one another; a separate project offer cannot use funds from another Share Offer or vice versa, without a members vote. Gen Community can issue two share classes, “A” shares for amounts up to £20,000 and “B” share for amounts above £20,000. Members can only invest in “B” shares if they are certified High Net Worth Individuals or Sophisticated Investors.
The society may use its property and profits only to promote its objects. The society will not pay members any dividend, bonus or other share in profits. However, the Society can pay interest on shares. The directors will set the rate of interest. In setting the rate, the society’s directors will take particular account of the society’s intention to provide an opportunity for the low carbon community to contribute financially to other low carbon communities, with the expectation of a social dividend, rather than personal financial reward.
The minimum “A” shareholding is 500 shares and the maximum “A” shareholding is currently 20,000 shares.
The minimum “B” shareholding is 5000 shares and the maximum “B” shareholding is currently 130,000 shares.
“A” shares cannot be sold, however they can be withdrawn, subject to the consent of the board of the Society.
Members can withdraw their shares by applying to the Gen Community board. The board will meet semi-annually, unless an extraordinary meeting is convened. Withdrawal requests will be considered on a “one-in-one-out” basis, unless in the event of a members death or an exceptional circumstance.
There is a limited amount of capital per annum in the Gen Community reserves. Therefore, withdrawal will be considered when there is a matching sum to replenish the amount being requested for withdrawal. If there are sufficient funds available withdrawal requests will be considered for cancellation.
Members are not to benefit financially if the society converts, or transfers its business or is wound up. The society has an asset lock in its governing rules, protecting its assets.
Please visit the Energy Saving Trust for a detailed explanation.
The share interest is linked to the Retail Price Index (RPI) to prevent erosion of the interests value by inflation over the 20-year duration of the scheme. Thus the income from the shares is protected from inflation.
The Feed in Tariff is linked to the Retail Price Index (RPI) to prevent erosion of the FiT’s value by inflation over the 20-year duration of the scheme. Thus the income from the FIT is protected from inflation.
At the society’s annual general meeting (and other general meetings of the society), each member has one vote. Members will have one vote irrespective of the number of shares they may hold.
If you can’t find an answer to your question please contact us and we’ll be pleased to help.