Taxes Consolidation Act 1997 section 500

Qualifying investors

Section 500 defines who qualifies as an investor for the purposes of the employment investment incentive scheme (EIIS) and sets out the circumstances in which an individual will be treated as connected with the company.

• A qualifying investor is an individual who subscribes on his or her own behalf for eligible shares in a qualifying company and who is not connected with the company at any time during the compliance period.
• An individual is connected with the company if he or she (or an associate) is a partner of the company or any company in the RICT group, is a director or employee who receives more than permitted payments, or has an interest in the capital of any company in the RICT group.
• An individual has an interest in the capital of a company if he or she directly or indirectly owns or is entitled to acquire any issued share capital, loan capital, voting power or rights to assets on a winding up, though shares previously qualifying for EIIS relief and shares subscribed for on formation of a company that has not yet commenced trading are disregarded.
• Any future entitlement to acquire shares or other rights is taken into account, and any rights or powers held by an associate are attributed to the individual, but an individual is not treated as connected merely because an associate holds shares and is a partner solely through a qualifying investment fund.