Want to achieve up to 40.00% tax relief against – PAYE income, self assessed income, rental income and ARF distribution income?
We have access to a range of EIIS schemes – please contact us at office@nelsonlife.ie or call us 091 44 11 88 for appointment.
What is the EIIS scheme?
The Employment and Investment Incentive (EII) is a tax relief incentive scheme which provides for tax relief of up to 40% in respect of investments made in certain corporate trades.
Tax relief will reduce your taxable income.
Tax relief is not confined to relief against earned income (like pensions), it includes ARF distributions and income from rental property. It should be considered by those who are close or above the Pension SFT.
An investor into an EIIS scheme can make a substantial reduction in their taxable income by making an investment.
The EII scheme allows an individual investor to obtain income tax relief on investments for shares in certain companies up to a maximum of €150,000 per annum in each tax year up to 2020. Initially relief is allowed on thirty fortieths [30/40] of the EII investment in the year the investment is made.
Potentially, this can result in a tax saving for the investor of up to 30% of the investment. Relief in respect of the further ten fortieths [10/40] of the EII investment will be available in the fourth year after the EII scheme investment was made providing that certain conditions are met. Potentially, this can result in a further tax saving for the investor up to 10% of the investment.
These conditions are ; An increase in the number of qualifying employees and an increase in the wages paid by the company to qualifying employees by at least the wages of one qualifying employee, or an increase in the companies R & D spend.
Example:
Mary who is single and age 60, made an investment of €70,000 into a qualifying EIIS company on 30 December 2017,
Her salary for 2017 was €140,000 and tax deducted of €39,012 and she had no other income during the year.
Mary also paid €20,000 pension contributions.
The calculation for relief (ignoring USC)
Schedule E €140,000
less
pension investment €20,000
less
EIIS relief €52,500 (only 30/40ths of relief now)
Therefore taxable income is NOW €67,500
Taxable income 2017:
€33,800 x 20% plus €33,700 x 40% = €20,240
less
Non refundable credits
Single €1,650 & PAYE €1,650 = €3,300
less
Refundable credits
PAYE paid €39,012
Therefore – REFUND DUE €22,072
KEY RISKS – IMPORTANT PLEASE READ.
1. This is a medium to long term investment (minimum of four years from date of investment of the funds) and there is no early exit mechanism.
2. If you invest in this Fund you may lose some or all of the money you invest.
3. There is no guarantee that the Fund will achieve its investment objectives.
4. Investors are exposed to the performance of the small and medium sized companies in which the Fund will invest.
5. Income tax relief which is available in two tranches may not be granted or may be withdrawn if the conditions of the legislation are not satisfied by the Manager, the Fund, Investee Companies and/or Qualifying Investors.
6. The Manager may not succeed in finding suitable companies and/or fully investing the Fund which may result in a return of uninvested funds and a reduction or recovery of the income tax relief already claimed or potentially available to Investors.
7. You may not have sufficient income taxable at the higher rate so that part or all of the first tranche of income tax relief on 30/40ths of the investment amount, if obtained, could be obtained at a lower rate than the higher rate then applying.
8. The higher rate of income tax could reduce from its current 40% rate so that the second tranche of income tax relief on 10/40ths of the investment amount, if obtained, in the year of assessment following the end of the four year investment period could be obtained at a lower rate than the current 40% rate.
9. You may not have sufficient income taxable at the higher rate so that the second tranche of income tax relief on 10/40ths of the investment amount, if obtained, could be obtained at a lower rate than the higher rate then applying. No income tax relief will apply to the second tranche of income tax relief on 10/40ths of the investment amount in the year of assessment following the end of the four year investment period if you have no taxable income at that time.
Warning: The information contained in this document is based on our understanding of current tax legislation and the current Revenue Commissioners interpretation thereof and is subject to change including retrospectively without notice. This is intended as a general guide only and is not a substitute for individual tax or investment advice. Potential Investors should seek competent professional advice specific to their circumstances prior to investing. Investors are responsible for establishing their entitlement to participate in this investment and for making their own tax relief claims.
WARNING: Past performance is not a reliable guide to future performance.
WARNING: The value of your investment may go down as well as up.
WARNING: You may lose some or all of the money you invest.
WARNING: These funds may be affected by changes in currency exchange rates.
WARNING: If you invest into this product you will not have access for at least 4 years from the date the Fund makes its investments.
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