Revenue Note for Guidance

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Revenue Note for Guidance

600J Qualifying investment (investor perspective)

Summary

Section 600J sets out what is a qualifying investment from the perspective of the investor.

Details

(1)Subject to section 600K and 600L, that an investment shall be a qualifying investment where—

  1. (1)(a)an individual subscribes for eligible shares in a qualifying company, and
  2. (1)(b)the investment complies with this section and section 600E.

(2)Subsection (2) sets out the requirements of a minimum amount of investment.

(2)(a)The eligible shares must be held by the individual for a period of 3 years from the date of investment. This is in accordance with the requirement in Article 21a(4) of GBER.

(2)(b)There must be a minimum amount of investment in eligible shares in a qualifying company on the date of investment. The following minimum amount of investment is required—

  1. (b)(i)€20,000, or
  2. (b)(ii)€10,000, where at the time of investment—
    1. (b)(ii)(I)the eligible shares held by the individual represents a minimum 5% of the ordinary share capital of the qualifying company, and
    2. (b)(ii)(II)the eligible shares held by the individual entitle the individual to not less than 5% of—
      1. (b)(ii)(II) (A)the profits available for distribution to the equity holders of the qualifying company,
      2. (b)(ii)(II) (B)the voting rights of the qualifying company, and
      3. (b)(ii)(II) (C)the assets of the qualifying company available for distribution to equity holders,
      and
    3. (b)(ii)(III)no arrangements must exist which could—
      1. (b)(ii)(III)(A)cause the individual’s holding of eligible shares to fall below 5%, and
      2. (b)(ii)(III)(B)reduce the individual’s equity entitlements referred to in clause (II) in respect of the eligible shares below 5%.

(2)(c)Throughout the 3-year holding period the maximum shareholding that can be held by the investor in the qualifying company, or any company that is a member of the relief group of which the qualifying company is a member—

  1. (c)(i)represents not more than 49% of the ordinary share capital of the company, and
  2. (c)(ii)the individual is not entitled to more than 49% of—
    1. (c)(ii)(I)the profits available for distribution to equity holders of the company,
    2. (c)(ii)(II)the voting rights of the company, and
    3. (c)(ii)(III)the assets of the company available for distribution to equity holders.

(2)(d)The investor is required to retain a copy of certificates of qualification in respect of the qualifying company that were valid on the date of investment.

Relevant Date: Finance Act 2024