Tax relief hope for Boost Citylife

HENRIETTA Royle, head of the charitable organisation Boost Citylife, has held 'positive' talks with Treasury Minister Paul Boateng over giving the innovative scheme the same tax breaks as normal charitable giving.

Boost Citylife aims to raise £50 million from financial firms and institutions to regenerate parts of the East End. The City is already committed to £8 million of bonds launched only three weeks ago. Investors are guaranteed their capital back and their charity comes in the form of giving up the nominal interest on the bonds, which can then be used on urban renewal projects.

Royle said that allowing firms to claim back tax at their marginal rate on the nominal interest would cost the Treasury very little but could entice many more companies to buy the bonds. She said: 'The Government very much likes the idea in principle and the Inland Revenue has indicated that it could make tax relief on the bonds work and would not oppose it.

'All that is questionable is whether it can be done in time for the forthcoming Budget and Finance Bill.'

Boost calculates that only £1.5 million of tax relief would be needed to leverage £200 million worth of bonds, half from the City and half from matching funds.