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 acts for both investors and investees across all sectors including food, agri tech and med tech.
Máire has extensive experience in all areas of corporate law with a particular focus on shareholder relations, private equity and venture capital.
Máire also advises on the establishment of partnerships and partnership law.