Tax Breaks - The Business Expansion Scheme (BES)

Tax Breaks - Business Expansion Scheme

In Budget 2007, The Minister pointed out the importance of small business to the Irish economy, and he aims to do as much as possible to assist such businesses. This includes the BES, which is being extended from 1 January 2007 for a seven year period to 31 December 2013. It should be pointed out that changes signalled in Budget 2007 are subject to EC approval.

Tax relief is proposed to be available to individuals only, as follows:-

Individuals Tax Relief

Deduction of €150,000 (was €31,750) can be claimed against income per individual per tax year following on from Budget 2007.
Relief is available at the higher rate

Unutilised investment can be carried forward

Relief will be clawed back if you sell your shares within five years

The full cost of the shares is allowable for capital gains tax purposes, if you sell your shares after five years.

Maximum Amounts that can be Raised

Budget 2007: The amount of capital that can be raised is being increased from €1 million to €2 million, subject to a maximum of €1.5 million to be raised in a twelve month period.

Archive: these are the legacy limits:-

From 3 December 1997, a company may raise a maximum of €317,500/Ł250,000 through the BES scheme. This has been extended in the December 2001 budget to €750,000/Ł590,673.

The amount was extended again in the 2004 Budget - €1million can now be raised.

In order to qualify...Companies

the company must be incorporated and trade in the Republic of Ireland

the company must be unquoted.

the investment must be in the form of ordinary share capital and carry no preferential rights. The share capital must be fully paid up.

the company must commence trading within two years of the share issue.

the company must carry out a qualifying trading activity, which include:-

manufacturing

internationally traded services

research and development

trading facilities in the IFSC docklands project.

Please note this is not a complete list. Also note that some of the qualifying activities require certification by a government agency to qualify for BES.

In order to qualify...Individuals

the individual must be resident in the Republic for the tax year in which relief is claimed

the individual must own less than 30% of the controlling shares of the company

The Role of Boylan & Dodd

How will we help you utilise this relief? We will:-

Find the right BES company or BES fund for you as an individual investor.

For companies, we can ensure your BES application is successful.

We will also help you find investors for your company.

Please EMail us by clicking here.

Individuals Tax Relief
Deduction of €150,000 (was €31,750) can be claimed against income per individual per tax year following on from Budget 2007. Relief is available at the higher rate Unutilised investment can be carried forward Relief will be clawed back if you sell your shares within *five years* The full cost of the shares is allowable for capital gains tax purposes, if you sell your shares after five years.
Maximum Amounts that can be Raised
Budget 2007: The amount of capital that can be raised is being increased from €1 million to €2 million, subject to a maximum of €1.5 million to be raised in a twelve month period. Archive: these are the legacy limits:- From 3 December 1997, a company may raise a maximum of €317,500/Ł250,000 through the BES scheme. This has been extended in the December 2001 budget to €750,000/Ł590,673. The amount was extended again in the 2004 Budget - €1million can now be raised.
In order to qualify...Companies
the company must be incorporated and trade in the Republic of Ireland the company must be unquoted. the investment must be in the form of ordinary share capital and carry no preferential rights. The share capital must be fully paid up. the company must commence trading within two years of the share issue. the company must carry out a qualifying trading activity, which include:- manufacturing internationally traded services research and development trading facilities in the IFSC docklands project. Please note this is not a complete list. Also note that some of the qualifying activities require certification by a government agency to qualify for BES.
In order to qualify...Individuals
the individual must be resident in the Republic for the tax year in which relief is claimed the individual must own less than 30% of the controlling shares of the company
The Role of Boylan & Dodd
How will we help you utilise this relief? We will:- Find the right BES company or BES fund for you as an individual investor. For companies, we can ensure your BES application is successful. We will also help you find investors for your company. Please EMail us by clicking here.