Persons involved with BES companies will be interested to know that the new Employment Investment Incentive or EII (the
scheme that will replace BES relief) has been approved by the EU.
The EII scheme differs to
BES relief in a number of respects. For
investors, the key difference is that the initial relief is limited to 30% of
the amount invested (rather than 41% under existing BES rules). The remaining 11% is given at the end of 3
years provided that all of the various conditions for entitlement to relief have
been satisfied throughout that period.
Because of this overlap there
was some doubt about what tax relief would operate in respect of investments
made in the period from 25 November until the end of this year.
Revenue have confirmed that both the BES and EII schemes will run
concurrently throughout the period from 25 November 2011 to 31 December 2011. Where shares are issued during this period,
the qualifying company that issued the shares can elect in writing to the
Revenue Commissioners, on or before 31 December 2011, to have the investment
treated as a BES investment.
To ensure maximum upfront tax relief for investors, it is critical
that the target company make an election before year end to qualify for BES relief.
For more information on this contact Derek Andrews @ 01 6316075 or derek@andrewstax.ie
