Community Investment Tax Relief (CITR) Explained (2026/27)
How Community Investment Tax Relief gives individuals and companies Income Tax or Corporation Tax relief for investing in accredited Community Development Finance Institutions.
What CITR Is Trying to Achieve
Mainstream banks and lenders often won't lend to certain disadvantaged communities or small enterprises in deprived areas, even where the underlying business case is sound. Community Development Finance Institutions exist to fill that gap, and Community Investment Tax Relief is the government's way of encouraging individuals and companies to put capital into accredited CDFIs by offering tax relief in return.
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An investor — individual or company — puts money into an accredited CDFI, either as a loan or an equity-type investment depending on the institution's structure. In return, tax relief is given against Income Tax (for individuals) or Corporation Tax (for companies), spread across the years the investment is held, rather than as a single upfront deduction.
How CITR Differs From EIS, SEIS and VCT
It's easy to lump all tax-advantaged investment reliefs together, but CITR sits in a different category:
- EIS, SEIS, VCT: aimed at early-stage or growing trading companies, with relief tied to genuine commercial risk in a private business.
- CITR: aimed at accredited CDFIs that on-lend into disadvantaged communities and social enterprises — a policy tool for community finance rather than growth-company investing.
Sources
Frequently asked questions
What is Community Investment Tax Relief (CITR)?
CITR is a tax relief for individuals and companies that invest in an accredited Community Development Finance Institution (CDFI), which in turn lends to disadvantaged communities and enterprises that struggle to access mainstream finance. The relief is given against Income Tax or Corporation Tax over the life of the investment.
How is CITR different from EIS, SEIS or VCT relief?
EIS, SEIS and VCT relief are aimed at investing directly (or via a fund) in early-stage or growing UK companies for capital growth. CITR is specifically about investing in accredited CDFIs that lend into disadvantaged communities — a different investment vehicle and a different policy purpose, and the two shouldn't be confused when comparing tax-advantaged investments.
Who can claim CITR?
Both individuals (against Income Tax) and companies (against Corporation Tax) can claim CITR, provided the investment is made into an investment or loan accredited under the scheme with a body recognised as a Community Development Finance Institution.
Is CITR still available in 2026/27?
CITR remains part of the UK tax system, though it is a comparatively small and specialist relief compared with EIS/SEIS/VCT. Anyone considering it should check the current list of accredited CDFIs and confirm eligibility directly with HMRC or the investee institution before committing funds, since accreditation and scheme details can change.
What happens if the investment is withdrawn early?
Withdrawing the investment before the end of the relevant holding period can trigger a clawback of some or all of the tax relief already claimed, similar in principle to the clawback rules under EIS — the exact mechanics depend on the terms of the specific accredited investment.
Is CITR relief the same rate every year?
The relief is spread over the years the investment is held, but the exact percentage and any changes to the scheme should always be checked against current gov.uk guidance rather than assumed, since this is a smaller, less frequently updated relief compared with the mainstream income tax and CGT schemes.
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