3 October 2014
    
IN THIS ISSUE
Quintas Quarterly Newsletter
Introduction
Retirement Planning
Funding for SMEs - Whats available
Current Vacancies
7 tips to get the right Life Insurance
Tax Implications on Debt Writedown
Diesel Rebate Scheme (DRS)
EII - What is it? Old BES v's New EII
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EII - What is it? Old BES v's New EII
by Stephanie McLarnon
 

Employment & Investment Incentive (“EII”) scheme is one of the final remaining opportunities for individuals to claim Income Tax Relief at the Marginal Rate of 41%. While it provides Tax Relief for individual investors it also provides companies with an instant cash flow benefit. This investment scheme is designed to promote both job creation and investment in Small & Medium Size Businesses using investment capital.

EII gives opportunities to individuals to invest up to a maximum of €150,000 in exchange for shares in a particular Corporate Trade for a 3 year period. EII promotes a 3 year investment period which is evident from the up to 41% refund available being spread out between the start and the end of the holding period.  The initial Tax Relief of 30% may be claimed in the year of investment once the shares are issued. The additional 11% benefit is only received by the investor if the company has met its requirements of increased employment or investment in Research and Development.

There is a claw-back of the 30% relief claimed by the investor if they sell their shares within the 3 year period or if the company does not continue to qualify as an EII company for the duration of the investment.

It is worth noting that the Finance Act (No. 2) 2013 removed EII from the high earners restriction for a period of 3 years. As a result of this the scheme has become more attractive for high net worth individuals.

Example

The following are the potential returns available based on various investment amounts, assuming an overall return of €1.00 for every €1.00 invested.

 

Amount Invested

10,000

50,000

150,000

Tax Saving 30% in 2014

3,000

15,000

45,000

Tax Saving 11% in 2017

1,100

5,500

16,500

Sale of Shares in 2017

10,000

50,000

150,000

Total Received from Investment

14,100

70,500

211,500

Net Gain on Investment

4,100

20,500

61,500


If you would like to find out more about the EII scheme contact us on 021 4641400 or email info@quintas.ie

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