Community shares

Community shares can only be issued by co-operative and community benefit societies. Members have just one vote, regardless of how much they invest, and there are limits on how much you can invest, to prevent the society being dependent on a handful of large investors.

 

Your shares can never be worth more than you paid for them, but they could go down in value if the society gets into financial difficulties. Community shares do not pay a dividend but can pay a small amount of interest, the details of this will be set out in our Share Offer document.

In most cases, community shares qualify for 100% relief from inheritance tax. This is known as Business Property Relief. This relief is not available if the society does not provide any form of financial benefit to shareholders. This might be the case for some charitable community benefit societies and societies that have stated they will never pay interest on share capital.

The main reason why people buy community shares is to support a community purpose, not to make a financial gain, which is why this type of share offer is not subject to financial promotion regulations. Being unregulated reduces red tape and helps to keep the cost of making a share offer affordable for communities. But it also means your investment is not covered by the Financial Services Compensation Scheme, and you have no right of complaint to the Financial Ombudsman.

The video below is a great overview of community shares

Fox at Loxley Action Group. Website proudly created by Paul Jennings

FCA registration  number 8203