SCI is a tax incentive scheme which provides tax relief for individuals investing in shares in micro companies.
It applies to shares issued after 1 January 2019 and a company can raise a maximum of €500,000 under it.
To avail of SCI, the company must
- carry on a qualifying new venture which was not previously carried on by any other person
- be less than two years old
- not be a subsidiary or under the control of another company
- not have a subsidiary that does not carry on a qualifying activity
- not have any partner or linked enterprise.
The funds raised must
- be used within 4 years of the share issue for
- the purposes of carrying out relevant trading activities, or
- where the company has not yet commenced to carry out relevant trading activities, for research, development and innovation; and
- contribute to the maintenance or creation of employment.
In order that the investor might receive the tax relief, the company must provide a statement of qualification and certain other information to the Revenue Commissioners. The income tax relief is a deduction from total income but does not reduce PRSI or USC. There are clawback provisions.
For more information please contact Gillian Hobbs G.hobbs@beauchamps.ie, Kyle Wimpress k.wimpress@beauchamps.ie, Máire Cunningham M.cunningham@beauchamps.ie or your usual Beauchamps contact.
About the author
Máire Cunningham
About Máire
Máire is a partner in our corporate & commercial team. Máire has extensive experience in all areas of corporate law with recognised experience in venture capital and private equity investments, acting for investors as well as investee companies. She has advised Irish and international clients on a broad range of corporate transactions –asset sales, share sales and mergers as well as multi-jurisdictional corporate restructurings and commercial agreements.