1. What is the minimum investment age?
Loan stock applicants must be at least 16 years of age (see point 1. of the Loan Stock Terms and Conditions).
2. What is the minimum and maximum investment?
Minimum: £1,000. No maximum investment. To date the largest single investor has more than £400,000 with CBS.
3. What is the minimum and maximum term?
The minimum term is 1 year and the maximum term is 30 years. The longer you invest your money with us, the better it is for our financial planning and our ability to get funds from other sources.
4. What interest rate can I choose and is the interest rate fixed?
You can select anything between 0 and 5% if the term is for 5 years or more, or between 0% and 4% for shorter terms. Any interest that you forgo will help us to house more vulnerable and homeless people.
The interest rate is fixed for the length of the term. Choosing a lower interest rate allows us to provide homes and support for more people. See our loan calculator for how many people your investment will help.
5. Which country do I need to live in to invest?
In principle you can be a resident anywhere in the world to invest in Green Pastures Loan Stock. If you are not resident in the UK, you will need first to check your local investment regulations as to whether you are allowed to invest overseas, particularly in unlisted securities. Investments from outside the UK need to be received in sterling (GBP).
6. How does GP pay me my interest?
Quarterly, annually or rolled up at the end of the term. Payments are made by bank transfer.
7. How can GP pay up to 5% interest?
To read our section on Affordability, please click here, and scroll down.
8. What does “rolled up” mean?
Interest that is not paid at the end of the applicable interest period, but which is, instead, added to the outstanding principal amount of the loan (hence the phrase "rolled up"). Interest will then accrue for the following period on the total amount of outstanding principal and interest rolled-up net of tax. See also TAX FAQs below.
9. When can I get my money back? What if I want my money back early?
To read our section on Loan Stock Redemptions, please click here, and scroll down.
10. What does "unsecured" mean?
Green Pastures issues unsecured Loan Stock. Unsecured means that your money is not secured against any property (in the way that a mortgage is). Loan stock subscriptions are unsecured because securing properties against loan stock would interfere with CBS’ ability to obtain mortgages and bank finance. Furthermore, refinancing property every time investments matured would be impractical. Loan Stock is a vital ingredient in funding the expansion of CBS because we can obtain only about 65% of the cost of a property by way of bank loans. Without the loan stock the operation would stagnate, and we are always so grateful for the support that is received via the Loan Stock.
11. How secure will my investment be?
Your investment is unsecured, which means you do not have a charge, or first call, on any of CBS's specified assets. Based on audited figures for the year ended 31st March 2020, CBS, with it's wholly-owned subsidiaries, had net assets of £5.4m. This means that, in theory, if CBS were wound up and all its debts paid, there would be £5.4m left over before liquidation costs.
12. What happens when my investment matures?
Sometime before your investment is due to mature you will receive an enquiry asking whether you wish your loan to be repaid or reinvested. If you choose to reinvest your funds, a simple form will be sent to renew the subscription. If you choose to withdraw the money, you will need to give us instructions as to where and how to remit the funds. We may need to verify the authenticity of such instructions.
13. How do changes in the benefits system affect Green Pastures’ model?
Our partners provide supported accommodation to their residents. Housing Benefit pays for most or all of the rent of a homeless applicant. Where the landlord provides supported accommodation, Housing Benefit can be classed as ‘Exempt Accommodation Allowance’ (EA). EA is defined as accommodation provided by a non-metropolitan county council in England, a housing association, a registered charity or voluntary organisation where that body or a person acting on its behalf also provides the claimant with care, support or supervision. When providing EA, the landlord can claim for other costs related to the bricks and mortar of the building but not the support. EA is exempt from Universal Credit. No changes have been implemented to date by the government with respect to reforming EA although changes are expected.
14. Will I need to declare interest payments on my tax return?
15. Is the interest paid net of tax?
Interest is paid net of basic rate income tax and is taxable as income. PLEASE NOTE: If you take rolled up interest, that interest will all be taxed in the year in which it is received by you, which might take you into a higher rate tax band. If you are entitled not to pay tax on your interest, you can claim back the tax through the completion of your HMRC self-assessment form. If you are not required by HMRC to complete a self-assessment form, you can reclaim the tax through completing a Form R40. This form is designed for the repayment of tax deducted from savings and investments. If you are a tax-exempt charity, registered as such with HMRC, your interest will be paid gross of tax.
16. If my tax status changes during the loan term can this be accommodated within the loan term?
All loan stock investments are taxed at source currently at 20%. If at any point, whether at commencement or during the term, you have to pay more or less than 20% tax due to your earnings you will need to reconcile this in your annual self-assessment or through PAYE.
17. Where can I find CBS on the FCA’s register, where is the record of your registration?
The item is on the FCA's mutuals register and a record can be found here. As at 5 January 2021, the FCA had not posted either our 2019 or 2020 accounts. These are available via the link at item 20 below.
18. Would my loan stock be covered by the Financial Services Compensation Scheme (FSCS)?
No. This is a scheme for banks. CBS is not a bank and we are not able to be a part of the FSCS. The security of our loan stock comes from our equity/borrowing ratio and our financial model. Further information is available in our Annual Report and Accounts via the contact us page.
19. Is Green Pastures a bank?
No. Green Pastures is a CBS under the Industrial and Provident Society Act (IPS). CBS is a vehicle that enables us to claim charity status whilst raising funds through issuing Loan Stock. We are governed by our Rules and registered with the Financial Conduct Authority.
20. Where can I view Green Pastures’ accounts?
Available vis this link, or upon request.
21. What happens if the investor dies? Is loan stock immediately repayable to their representatives?
A family member, solicitor or other executor needs to inform GP of the death submitting a copy of the death certificate. The term of the loan to GP ends on the date that is on the death certificate and no interest accrues after the date of death. Once the executor has obtained probate, they can issue instructions to GP as to where to remit the amount of the loan and interest accrued to the date of death. Payment will follow shortly thereafter. No-one, including solicitors, can normally be an executor unless they have Probate or Letters of Administration appointing them although there can be exceptions.
22. Can I invest money for my grandchildren? Or under 16s?
You will need to create a ‘Bare Trust’ (a legal document irrevocably passing the assets to your child). The investment is held by trustees on behalf of the child. The investment doesn't form part of your estate for inheritance tax purposes. You must administer the trust for the sole benefit of the child. We recommend you take advice from your accountant or other professional adviser to check such a letter.
The investor sends us a letter alongside their applications for loan stock stating that they are the nominee for the child. On the Loan Certificates it should say "[investor name] – trustee for [child’s name]". We would advise your accountant to look over this letter, not least because trusts carry tax consequences.
23. Can a Trust invest in Green Pastures?
Yes. Money has been invested in GP in the name of a family trust.
General maintenance costs of 0.75% of capital outlay have been successfully budgeted each year. Cyclical repairs of 0.8% are serviced via RPI-linked lease increases.
25. What does Green Pastures do with my investment?
All investments are utilised to release the church, in its widest sense, to eradicate homelessness. In addition to loan stock, we borrow up to 60% again from banks on a secured basis, thereby giving us more capacity. All of our funds, by necessity, are pooled and our policy for utilisation, which needs to be flexible, is:
- Approximately 10% is retained in liquid assets to enable us to meet loan stock repayments, to take buying opportunities and to manage any unforeseen circumstances;
- Up to approximately 20% is utilised in new build or redevelopment projects. These provide modern, energy-efficient homes either for the homeless or for sale on the open market to generate surpluses to help build our capital base and buy more property. This is important to provide reservers that keep pace with our increasing borrowing and to provide free funds for investment;
- The remainder goes directly into buying property to provide homes and support for the homeless and those in most need. We also have a small portfolio of investment properties which are let on the open market and available for sale to raise cash if a squeeze were to occur.
These percentages are approximate and can vary considerably depending on cash flows and opportunities that arise. We utilise loan stock before borrowing from banks.
26. How much money is going towards administrative expenses including executive pay, marketing etc.?
Administrative expenses, executive pay and marketing are covered by rental and investment income, supplemented from time to time by development profits. We have adopted a deliberate policy of investing in a Partnership Management team to build the business, a process which inevitably takes time to be cost effective. It is bearing fruit: CBS is presently growing at about 10% annually and has been hiring more Partnership Management staff to expand our coverage. During May 2021, we were about to hire a Marketing Manager. Executive Directors' remuneration is disclosed in the Notes to our Annual Report and Accounts.
27. Can I invest under a Power of Attorney and if so, what Anti-Money Laundering Evidence is needed to be supplied?
Yes, it is possible to invest under a power of attorney. We would need sight of the original attorney document or a certified copy signed by a solicitor. We would need ID evidence from the Attorney holder and one item of ID showing the name and address of the investor. If necessary, this could be a letter from a care home confirming occupancy,
28. We would like to invest as a charity or business, how do we complete the application form?
Please enter the name of your organisation in the first box “Company/ Organisation name" and enter the registered number in the box below.
In the signature boxes at the bottom of page 1, please enter the names of two directors or trustees; their dates of birth; and their capacities in which signing. In the case of a church, the treasurer and senior minister should be the signatories.
Please comply with the identification requests under the heading “Investments over £5,000” and "Investments over £100,000" as appropriate in respect of either one signatory.