The measure is a Capital Gains Tax (CGT) relief for individuals who invest in innovative start-up SMEs. The relief aims to assist start-up SMEs in attracting investment and to make Ireland a more attractive location for business angel investors. It is a form of permissible State aid and will operate in compliance with the General Block Exemption Regulation (GBER).
The relief is intended to help address the challenges faced by new early-stage innovative companies seeking funding by encouraging investors to acquire shares in these innovative companies. The relief offers a reduced rate of CGT of 16 percent for individual investors, or 18 percent in the case of an investment via a qualifying partnership, on the sale of that investment to a third party. The reduced CGT rate is available on a gain up to a maximum of twice the value of the investor’s initial investment.
A company may apply to Revenue to receive certificates of qualification. As part of this process, Revenue may engage with Enterprise Ireland to ascertain if a company should be issued certificates of qualification, including a certificate of commercial innovation.
Speaking today, Minister Donohoe said:
“This is very welcome news for innovative start-ups looking to attract investment, this Government is committed to cultivating a thriving business angel investment ecosystem in Ireland, and this relief will, I believe, contribute greatly to that goal.”
Further details on how to apply for the relief are available on the Revenue website.
