The Business Expansion Scheme (BES) allows individual investors to obtain income tax relief  on investments in each tax year. There is no tax advantage for the company in receipt of the BES, but securing this funding may enhance their ability to attract other external funding.

A qualifying company is one which:

• is an unquoted company (except in the case of companies listed on the Developing Companies market)
• is engaged in a qualifying trade
• has its issued share capital, fully paid up and
• is not intending to wind up within 3 years of receiving BES investment unless it is for bona fide commercial reasons
• Internationally traded services, manufacturing and companies carrying out research and development with a view to carrying out a qualifying trade are eligible to apply .

Investments in qualifying companies or approved funds under the Business Expansion Scheme, from a minimum of €254 up to a maximum of €31,750, are tax deductible. The upper limit rises to € 150,000 from 1st January 2007.

The relief is available to both you and your spouse, providing you both have sufficient income in your own right to cover the investment. If the amount invested exceeds €150,000, or full relief cannot be obtained because of insufficiency of income, further relief can be obtained in later years. This scheme is set to end on 31st December 2013 unless it is extended beyond this date.

Email us: bes@accountantireland.info