Davy/BDO business expansion scheme

Prezatch

Is anyone here invested in this product? It was briefly mentioned in another thread by Newacc and I see that there has actually been and update made to the scheme from Budget 2015 and 2016 (see this article http://www.hlbmckeoghgallagherryan.ie/mary-mckeogh-discusses-eiis-tax-relief-with-the-sunday-business-post/)

Basically you can invest a sum of taxable income up to 150k per annum and after 4 years get tax relief back on this and a possible capital gain (or suffer a loss). The appendix in this PDF file gives an example:
http://bes.ie/downloads/EII_Davy-Tax-Relief-Fund-2015_A4_Prospectus_November-2015.pdf

Just wondering if anyone can share their experiences/returns or whether anyone has looked into it in greater detail?

richardbradley

I have dipped my toe in last year but early days - couldnt find much past performance history so didn't over risk.

It appears on the surface a decent investment in the current climate of very little cash deposit interest and expensive equities but time will tell. I expect no capital growth - if I get my initial sum back after four years, plus the tax back, then I'll think it is a good investment. I would only consider for higher rate tax payers and those who are maximising pension contribution.

Would love to here from someone whos held these for a while as it appears impossible to find previous years performance data anywhere!

Prezatch

Do you get any investor reports showing the value of your investment to see if it's in the red or not?

phantom_lord

Looked into these last year, but didn't like the fee structure and the risks involved in the schemes offered. Would be interested in looking at anything on offer again this year though.

Cute Hoor

I've dabbled a bit on these over the years, used to be BES, now EIIS. Not for the faint hearted really. Essentially a tax avoidance scheme, you invest a sum of money in an EIIS qualifying business, you get a 30% tax rebate in year 1 and a further 10% in year 4 subject to certain conditions being met. You will hope that the business will then return your money after the 4 years with a little bonus (usually around 10%). All you're guaranteed is the 30% tax rebate, the rest is at risk. If everything worked perfectly you would get a return of around 80% after 4ish years. Touch wood, so far it has worked out for me (BES investments), but I have invested in individual businesses rather than in a fund like the Davy/BDO one. Pros and cons in both, going with the Davy/BDO one your risk is spread across a number of businesses, if one fails then every chance that you won't get all your money back. I'm not sure that it is the safest or most financially rewarding investment you could make.

strandsman

Cute Hoor wrote: »

I've dabbled a bit on these over the years, used to be BES, now EIIS. Not for the faint hearted really. Essentially a tax avoidance scheme, you invest a sum of money in an EIIS qualifying business, you get a 30% tax rebate in year 1 and a further 10% in year 4 subject to certain conditions being met. You will hope that the business will then return your money after the 4 years with a little bonus (usually around 10%). All you're guaranteed is the 30% tax rebate, the rest is at risk. If everything worked perfectly you would get a return of around 80% after 4ish years. Touch wood, so far it has worked out for me (BES investments), but I have invested in individual businesses rather than in a fund like the Davy/BDO one. Pros and cons in both, going with the Davy/BDO one your risk is spread across a number of businesses, if one fails then every chance that you won't get all your money back. I'm not sure that it is the safest or most financially rewarding investment you could make.

How do you find individual businesses to invest in?

Cute Hoor

strandsman wrote: »

How do you find individual businesses to invest in?

There will be lots of them advertised in the Sunday Business Post during December

TiGeR KiNgS

strandsman wrote: »

How do you find individual businesses to invest in?

You can contact BDO and request a list of businesses looking for funding under EIIS. They should be able to send you on proposal document for businesses that interest you.

If I recall BDO get a finders fee based on funds raised which is then absorbed by the business for acting as facilitator to the transaction. So the investor has no upfront fees (open to correction and I have no connection to BDO).