PAYE Settlement Agreement for 2024
It is getting close to that time of year when employers need to consider whether they are required to make an application to Revenue in relation to a PAYE Settlement Agreement (PSA) for 2024.
Angel investors are the private individuals or groups that invest capital in startup companies and entrepreneurial ventures, primarily in the fields of technology and innovation. However, their investments can extend beyond these sectors, often serving as an alternative to traditional funding sources like bank loans or venture capital. In return, angel investors typically receive benefits such as partial company management and equity stakes. It's important to note that not all types of angel investments qualify for the new relief.
Generally, when individuals, partnerships or trusts realise gains on chargeable assets on or after 6 December 2012, they will be levied CGT rate of 33%. Chargeable assets include properties, copyrights, patents, shares, etc. However, Finance Act 2023 has introduced a reduction on this rate for angel investors, bringing it down to 16% or 18%.
Under the new rate
This relief allows you to save up to 15%-17% on CGT compared to the standard rate. However, certain requirements must be met to qualify for this relief.
Requirements
There are three main types of requirements:
To avail of the new rate on gains from angel investment, these requirements must be satisfied. Some key conditions include:
Qualifying investment & qualifying investors:
An investment will not be qualified unless it is based on a business plan and the company shall be able to provide the copy certificates of qualification issued by the Revenue Commissioners. Please note that the investor can only have a minor share in the investee company. Relief will not be granted if you own that company while applying for the reduced rate.
Qualifying company:
Start-up companies refer to companies that are less than five years old. The criteria to define an innovative company lies in GBER Article2(80) . Investees are required to pass through the qualification process with the Revenue and provide a copy of the certificate. SMEs are companies that employ fewer than 250 persons and have an annual turnover not exceeding €50m, and/or an annual balance sheet total not exceeding €43m. Additionally, investee companies must not be facing any financial difficulties.
Finance Act 2023 was signed into law by the President on December 18, 2023. Therefore, the reduced rate of 16% or 18% applies if your case meets all three types of requirements. Detailed information on the requirements and consequences of partial non-compliance is provided in Chapter 6 of the Finance Act 2023.
If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of the Mazars private client team below:
Staff Member | Position | Telephone | |
Alan Murray | Tax Partner | amurray@mazars.ie | 01 449 6480 |
Adrian Farragher | Senior Manager | afarragher@mazars.ie | 01 449 4400 |
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