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Amendment of Part 16 of Principal Act (relief for investment in corporate trades)
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26. (1) Section 497 of the Principal Act is amended—
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(a) in subsection (3) —
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(i) by substituting “B - A” for “A - B”, and
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(ii) by substituting “is the greater of” for “is the lesser of”,
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and
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(b) in subsection (4) —
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(i) by deleting “(in this section referred to as the “relevant issue”)”,
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(ii) by substituting “B - A” for “A - B”,
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(iii) by substituting “is the greater of” for “is the lesser of”, and
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(iv) by deleting “before the relevant issue”.
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(2) Section 502 of the Principal Act is amended—
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(a) in subsection (2), by substituting “In respect of shares issued on or before 8 October 2019, a qualifying investor who makes a qualifying investment in a qualifying company shall be entitled, subject to this section, to relief for—” for “A qualifying investor who makes a qualifying investment in a qualifying company shall be entitled, subject to this section, to relief for—”,
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(b) by inserting the following after subsection (2):
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“(2A) In respect of shares issued after 8 October 2019, a qualifying investor who makes a qualifying investment in a qualifying company shall be entitled, subject to this section, to relief for the full amount subscribed, which shall be given, subject to section 508J(4), as a deduction from his or her total income for the year of assessment in which the shares are issued.”,
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(c) by substituting the following for subsection (3):
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“(3) (a) The maximum qualifying investment in respect of which an investor may claim relief under this Part is—
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(i) €150,000 in respect of the year of assessment 2019,
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(ii) in respect of the year of assessment 2020 and each subsequent year of assessment—
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(I) €500,000 in respect of an investment to which paragraph (b) applies, or
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(II) €250,000 in respect of all other investments.
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(b) This paragraph applies to an investment in eligible shares where the investor undertakes not to dispose of those shares for a period of 7 years, and for the purposes of applying sections 508M and 508P to this investment, the definition of relevant period in section 488(1), shall be read as if the reference to ‘4 years’ were a reference to ‘7 years’.
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(c) A qualifying investor shall, for a qualifying investment, provide to the Revenue Commissioners, through such electronic means as the Revenue Commissioners make available, such information as the Revenue Commissioners may require for the purposes of paragraph (a).”,
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and
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(d) in subsection (4) by substituting “In respect of shares issued on or before 8 October 2019, an amount shall not be given as a deduction under subsection (2)(b) unless in relation to a qualifying company and its qualifying subsidiaries—” for “An amount shall not be given as a deduction under subsection (2)(b) unless in relation to a qualifying company and its qualifying subsidiaries—”.
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(3) Section 508F of the Principal Act is amended—
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(a) in paragraph (a) of subsection (1) by inserting “or 502(2A)” after “under 502(2)(a) ”, and
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(b) in paragraph (b) of subsection (1) by substituting “second stage” for “follow-on”.
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(4) (a) Section 508J of the Principal Act is amended, with effect from 8 October 2019—
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(i) by substituting the following for subsection (2):
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“(2) The managers of a designated fund shall, within 30 days of receipt of a statement of qualification, deliver to the Revenue Commissioners, through such electronic means as the Revenue Commissioners make available, a return of the holdings of eligible shares shown on statements of qualification received by them.”,
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and
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(ii) in subsection (4) —
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(I) by inserting “and” in paragraph (a) after “by the managers of a designated fund,”,
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(II) by deleting “and” in paragraph (b), and
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(III) by deleting paragraph (c).
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(b) Section 508J of the Principal Act is amended, with effect from 1 January 2020 by substituting “then the individual shall be entitled to relief, under section 502(2)(a) or 502(2A), as a deduction from his or her total income for the year of assessment in which the amount was subscribed to the designated fund.” for “then the individual may elect by notice in writing to the Revenue Commissioners to have the relief due under section 502(2)(a) given as a deduction from his or her total income for the year of assessment in which the amount was subscribed to the designated fund, instead of (as provided for in section 502(2)(a)) as a deduction from his or her total income for the year of assessment in which the shares are issued.”.
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(5) Section 508R of the Principal Act is amended—
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(a) in subsection (1) —
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(i) in paragraph (a), by substituting the following for subparagraphs (i) and (ii):
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“(i) shares that belong to that individual, or
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(ii) shares that belong to another individual whose relief on those shares has been reduced by virtue of section 508P(3),”,
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and
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(ii) in paragraph (b), by substituting the following for subparagraphs (i) and (ii):
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“(i) shares that belong to that individual, or
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(ii) shares that belong to another individual whose relief on those shares has been reduced by virtue of section 508P(3),”,
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and
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(b) in subsection (9) —
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(i) in paragraph (a), by substituting “qualifying investment” for “relevant investment”, and
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(ii) in paragraph (b), by substituting “qualifying investment” for “relevant investment”.
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(6) Section 508V of the Principal Act is amended in subsection (3) —
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(a) in paragraph (d) by substituting “be,” for “be, or”,
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(b) in paragraph (e) by substituting “relief was claimed, or” for “relief was claimed.”, and
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(c) by inserting the following after paragraph (e):
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“(f) in the case of relief withdrawn in accordance with subsection (1)(b)(v), the date of the event the happening of which causes the relief to be withdrawn.”.
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(7) Section 508X of the Principal Act is amended in subsection (1)(a)(ii) by substituting “second stage” for “follow-on”.
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(8) Section 508Y of the Principal Act is amended by inserting the following after subsection (2):
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“(2A) A person who does not comply with subsection (2) shall be liable to a penalty of €3,000.
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(2B) Where the person mentioned in subsection (2A) is a company—
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(a) the company shall be liable to a penalty of €4,000, and
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(b) the secretary of the company shall be liable to a separate penalty of €3,000.”.
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