EII Scheme for Investors
What Is the Employment and Investment Incentive Scheme?
The Employment and Investment Incentive Scheme (“EII Scheme”) is a tax relief incentive scheme which provides all income tax relief to Qualifying Investors for investments in certain qualifying small and medium sized companies (“SMEs”)*.The EII Scheme offers one of the few remaining income tax reliefs and is one of the few sources of total income tax relief (which includes, for example rental income).
*Exceptions apply, for more information please refer to the Prospectus under the section “Relevant Trading Activities” on page 22.
The Davy EII Tax Relief Fund 2016 is now CLOSED. Please note that any applications received after 23 December 2016 will not be processed and will be returned in full.
The Davy EII Tax Relief Fund 2016 (“The Fund”)
The Davy EII Tax Relief Fund 2016 will be managed by BES Management DAC which is a joint venture between BDO and Davy and is Ireland’s longest running BES/EII Scheme Manager.
Key Characteristics of BES Management DAC:
- Managed by BDO and Davy;
- Successfully raised five EII Scheme Funds over the past 5 years;
- Previously raised 19 BES Funds over the past 21 years;
- Raised over €154 million which is invested in over 154 Irish companies; and
- Funds are managed by a professional and experienced management team
Prospective Investors should determine the suitability of the investment based on an assessment of their own personal circumstances, attitude to and capacity for investment risk. The investment may be suitable for investors who:
- Do not need access to their investment for the term of the investment, which will be at least four years from the date the Fund makes its investments;
- Will be able to avail of income tax relief on the full investment, within the relevant limits and restrictions;
- Are aware they may lose some or all of their investment; and
- Can afford to lose some or all of their investment.
Benefits of investing in The Davy EII Tax Relief Fund 2016:
1. Opportunity for Qualifying Investors to avail of one of the few remaining all income tax reliefs currently offering up to 40%** income tax relief*** (subject to certain qualifying conditions).
2. Opportunity for eligible investors to invest in a diversified fund with a minimum 4 year investment term which will:
- Spread your investment over a portfolio of established and performing SMEs;
- Focus on indigenous Irish companies with future growth potential; and
- Invest in a range of industries which will help reduce exposure to any one sector.
3. Avail of a professional, experienced and knowledgeable investment team.
**being the current higher rate of income tax and assuming continuation thereof.
***Terms and conditions apply. Income Tax relief on an investment in the Fund may be available to Investors in two tranches. Investors can avail of the first tranche of relief by deducting 30/40’s of the amount subscribed to the Fund from their total income for income tax purposes for either the tax year of subscription ending on 31 December 2016, or if so desired the tax year of investment by the Fund ending 31 December 2017. Investors can deduct 10/40’s of the amount subscribed from their total income for income tax purposes in the year of assessment following the end of the four year investment term , subject to conditions in relation to employment levels or expenditure on research and development being fulfilled by companies in which the Fund has invested. You should consult your tax advisor about the tax relief rules which may apply in your circumstances. This investment may not be suitable for all investors. For more information on the tax relief, please refer to section headed “The Relief” on page 20 of the Prospectus.
WARNING: If you invest in this product you may lose some or all of the money you invest.
The value of your investment may go down as well as up.
If you invest in this product you will not have any access to your money for at least four years from the date the Fund makes its investments. Other risks and terms and conditions apply.
The Funds are invested in established, indigenous Irish companies with future growth potential.
Below is a sample of companies in which previous Funds managed by BES Management DAC invested:
The companies outlined above are illustrative of the type of SMEs the Funds have or aim to invest in. The final portfolio of companies in which a Fund will invest will not be determined until after subscription monies have been received and the relevant Fund has closed, and could differ from the type of SMEs outlined above.
Risks of investing in The Davy EII Tax Relief Fund 2016:
- 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.
- If you invest in this Fund you may lose some or all of the money you invest.
- There is no guarantee that the Fund will achieve its investment objectives.
- Investors are exposed to the performance of the small and medium sized companies in which the Fund will invest.
- 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 eligible investors.
- 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 available to investors.
- 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 then applying.
- The higher rate of income tax could reduce from its current 40% rate so that the second tranche of tax relief on 10/40ths of the investment amount if obtained in the year of assessment following the end of the investment term could be obtained at a lower rate than the current 40% higher rate.
- 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 investment term 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 advice. Potential Investors should seek competent professional tax 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.