491 Restriction on relief where amounts raised exceed permitted maximum

Summary

This section provides that the maximum a company can raise under the EII and/or BES is €15 million. This €15 million maximum also applies to amounts raised under SURE. Where companies are associated, this overall maximum limit applies in relation to the amounts that can be raised by all such associated companies. A company may not raise more than €5,000,000 in any twelve-month period.

Details

Definition

(1) “qualifying subsidiary” has the meaning assigned to it by section 505.

Restriction on amounts raised

(2) A lifetime limit of €15 million applies in respect of the aggregate amount which a company or associated companies can raise through EII and/or BES funding.

(2)(3) Where the allowable limit has already been raised by associated companies (including the applicant company) no further amounts can be raised by the applicant company under the scheme. Where the amount previously raised by the associated companies (including the applicant company) is less than the allowable limit, the applicant company may only raise an amount equal to the difference between the amounts so raised and the allowable limit.

(4) Relief will not be given to the extent that a company (or a group of associated companies) raises more than €5,000,000 in either a single issue or by way of aggregate amounts raised in issues made in any twelve-month period.

(5) A company will be associated with another company where it could reasonably be considered that —

• (i) both companies act in pursuit of a common purpose,
• (ii) any person or group(s) of persons, having a reasonable commonality of identity, have or had the means or power, either directly or indirectly, to determine the trading operations carried on or to be carried on by both companies, or
• (iii) both companies are under the control of any person or group(s) of persons having a reasonable commonality of identity.

(5) The subsidiaries of companies are also taken into account for the purposes of these rules. A company is not considered associated with another company by reason only of the fact that a subscription for eligible shares in both companies is made by a person or persons who manage a designated investment fund acting as a nominee for any person or group of persons or groups of persons.

Shares not qualifying for relief

(6) In determining the amounts raised by a company or associated companies for the purpose of the overall allowable limit no account is taken of any amount —

• (a) subscribed by a person who does not qualify for relief, or
• (b) in respect of which relief is precluded by virtue of the operation of the €100,000/€150,000 limit placed on the relief available to an individual (by section 490).

Apportionment

(7) Where relief is denied to 2 or more individuals due to the application of the overall allowable limit, the available relief is divided between the individuals respectively in proportion to the amounts which have been subscribed by them for the shares to which their claims relate and which would, apart from the operation of the overall limit placed on relief, be eligible for relief.

Relevant Date: Finance Act 2019