Are you pay­ing too much tax?

Bray People - - NEWS -

39% 33% 41% 4% 5%

In­vest­ment can range from about €10,000 up to €150,000. You will re­ceive 75% of the tax re­lief in the year the in­vest­ment is made, with the fur­ther 25% payable af­ter year 4. For this rea­son most EII in­vest­ments should be made on the un­der­stand­ing you will not have ac­cess to your in­vest­ment for at least 5 years.

The scheme is in­tended to be a source of cap­i­tal for Ir­ish com­pa­nies to help them grow the busi­ness and in­crease em­ploy­ment. For a com­pany to be con­sid­ered a ‘Qual­i­fy­ing Com­pany’ they must be able to demon­strate af­ter 4 years that: 1. The num­ber of em­ploy­ees has in­creased, and 2. The wages paid have in­creased This type of in­vest­ing is con­sid­ered high risk, as you are pur­chas­ing shares in a small Ir­ish com­pany, where th­ese shares are not traded on any stock market. This means, the most likely way for you to get your in­vest­ment back, is for the Com­pany to buy back the shares af­ter 4/5 years. Need­less to say, the com­pany will need to be trad­ing well to be able to re-fi­nance the buy-back of shares, or to have suf­fi­cient cap­i­tal of its own to buy-back af­ter 4/5 years.

You can mit­i­gate this risk some­what by in­vest­ing in more than one com­pany, thereby spread­ing or di­ver­si­fy­ing the risk. There are funds de­signed for this pur­pose, where the fund in­vests in a range of com­pa­nies, and the in­vestor buys shares in the fund. You can gain ex­po­sure to about 10 com­pa­nies us­ing this route. The in­vest­ments are still to be con­sid­ered high risk.

If you would like to know more about EII schemes, of if you would like a con­sul­ta­tion about your fi­nances, please call Harry Crummy on (0402)32629.

Harry Crummy is a Cer­ti­fied Fi­nan­cial Plan­ner™ and a Qual­i­fied Fi­nan­cial Ad­vi­sor and is a prin­ci­pal at Ef­fi­cient Fi­nan­cial. See www.ef­fi­cient­fi­nan­cial. ie for more de­tails.

Year 2017

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