S497 Limits on amounts a qualifying company can raise

Summary

This section provides that the maximum a RICT Group can raise through the issue of eligible shares under EII, SCI and SURE is €16.5million in total. Where a company is a member of a RICT Group, this overall maximum limit applies to the amounts raised by all companies forming the RICT group. A RICT Group may not raise more than €5.5 million through the issue of eligible shares in any twelve-month period.

In addition, where a qualifying company has issued shares to which relief under Part 16 applies, and shares to which an entitlement to claim relief under section 600M may apply on their disposal, being relief for investment in innovative enterprises, the calculation of the €16.5m total amount of risk finance investment that has been raised by a qualifying company includes both the amount that is raised by the RICT group, of which the company is part, for the purposes of Part 16, and the amount that is raised by the relief group of which the company is part, for the purposes of Chapter 6A of Part 19 (relief for investment in innovative enterprises).

Details

(2)(b) The lifetime limit of €16.5 million applies in respect of the aggregate amount which a company and the companies within that RICT Group can raise through EII/SCI and SURE.

(4) Where the lifetime limit has already been reached by a company and/or companies in the RICT Group, any further amount raised by a member of the RICT group seeking relief under the scheme will not be a qualifying investment. Where the amount previously raised by a company and/or companies in the RICT Group is less than the allowable limit, only an amount equal to the difference between the amounts already raised and the allowable limit will be a qualifying investment.

(2)(a) The maximum amount that a company and/or companies in a RICT Group may raise in any 12 month period is €5.5 million whether that is raised in a single share issue or in aggregate where amounts have been raised through a number of share issues in that period.

(3) Any amount raised in excess of €5.5 million in any 12-month period shall not be a qualifying investment.

(5) Where shares are issued to 2 or more people and as a result of the lifetime and annual limits they would be precluded from claiming relief, the relief available will be divided between them in proportion to the amounts which have been subscribed by them for the shares to which their claims relate and which apart from this section would be eligible for relief.

(1)(a) When determining whether these limits have been reached, no account shall be taken of amounts subscribed for eligible shares by someone other than an individual who qualifies for the relief.

Account shall not be taken of an amount subscribed for eligible shares by a person other than an individual who qualifies for relief.

(1)(b) Eligible shares include any shares issued on or after 6 April 1984 in respect of which relief was available under Part 16.

(1)(c) Any amount raised by another company that was a part of the RICT Group in which the company now seeking to raise eligible shares is also part of shall be included when determining if the limits set out have been reached. However, any amount raised when the company seeking to raise eligible shares is no longer part of that RICT Group, shall not be included.

(6) Where a qualifying company has issued shares to which

1. relief under Part 16 applies, and
2. an entitlement to claim relief under section 600M may apply on their disposal,

then this section applies with modifications.

For the purpose of subsections (7), (8) and (9), the term “relief group” has the same meaning as in section 600B TCA.

The modifications to subsection (1) are

1. (7) the reference to “an individual who qualifies for relief” is to be read as a reference to an individual who qualifies for relief under Part 16 in respect of those shares and an individual who may be entitled to claim relief under section 600M TCA on the disposal of those shares,
2. the reference to shares “in respect of which relief was available under this Part” is to be read as a reference to shares in respect of which relief was available under Part 16 and shares in respect of which section 600M may apply on the disposal of those shares, and
3. references to the RICT group are to be read as including a reference to the relief group.

(8) The modification to subsection (2) is that the reference to a “RICT group” in subsection (2)(b) is to be taken as a reference to the relief group and RICT group of which the qualifying company, within the meaning of Part 16 and within the meaning of Chapter 6A of Part 19, is a member.

The modifications to subsection (4) are:

1. (9) references to a “RICT group” are to be read as a reference to the relief group and RICT group of which the qualifying company within the meaning of Part 16 and within the meaning of Chapter 6A of Part 19 is a member, and
2. references to a “qualifying investment” are to be read as a qualifying investment within the meaning of Part 16 and within the meaning of Chapter 6A of Part 19.

The modifications to subsection (5) are:

1. (10) the reference to “the giving of relief” is to be read as a reference to the giving of relief under Part 16, or the entitlement to claim relief under section 600M,
2. the reference to “the available relief” is to be read as a reference to the available relief under Part 16 and the entitlement to claim relief under section 600M,
3. the reference to “to which their claims relate” is to be read as a reference to claims under Part 16 and claims in respect of which an entitlement may arise under section 600M, and
4. the reference to “would be eligible for relief” is to be read as a reference to being eligible for relief under Part 16 or being entitled to claim relief under section 600M”.

Relevant Date: Finance Act 2024