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Has anyone invested in an EII project/scheme?

One More Toy

If so how did it go?

Had the opportunity to invest in a windfarm under the scheme a few years ago but pulled out at the last minute, kinda raining I didn't give it a chance

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Jim2007

duffysfarm wrote: »

invested in the great northern distillery in 2016 and just got word back yesterday that it is maturing this month with a decent return - up on 12%. Was going to invest in one of the other distilleries before Christmas but it was bad timing for me.
Its a good scheme overall and its a pity its not used more by companies

The annualized return on the S&P 500 over the same period was about 14.5% and the total return was 96%.

If you want to invest in a distillery that is one thing. But if you want to accumulate wealth, it was a lousy scheme in which you took on significantly more risk than required and achieved a poor rate of return in doing so.

People need to track and benchmark performance to know how they are doing.

duffysfarm

Thanks for the reply which is a little off topic imo, i thought this thread was about the EII scheme and not american shares. The main object of the eii scheme is not to achieve a significant return but to reduce your tax liability of which there are not many ways to legally do and investing in american shares is not one way that this can be done.

The rate of 12% does not include the tax relief of 40%. When you add the two together i think it was a decent return.

Is the 96% you refer to below before or after tax?

My investment was in an asset backed investment, in a company less than 30 minutes from where i live and where i know people who work there. There is still risk attached but not as risky as shares in america which to be honest as much as i admire it is a bit of basket case at the moment. I would not like to invest any of my money there right now.

The s&p outperformed everyones expectations and if i had invested in it and achieved that kind of return i would be very happy but i wouldnt think i was some gordon gecko or warren buffet investor. Its a bubble thats going to burse.

Jim2007 wrote: »

The annualized return on the S&P 500 over the same period was about 14.5% and the total return was 96%.

If you want to invest in a distillery that is one thing. But if you want to accumulate wealth, it was a lousy scheme in which you took on significantly more risk than required and achieved a poor rate of return in doing so.

People need to track and benchmark performance to know how they are doing.

alanceltic

Excellent post above. The EIIS scheme needs yo be looked at first and foremost as a tax reduction measure.

Any return on capital calculations need go held up against the risk/reward of the capital that you are investing

Show me any other financial investment that will yield an upfront 40% return that is guaranteed (assuming of course the scheme is compliant with their Revenue submission). There is no doubt that there are other products that will promise higher returns but this will be against a higher risk profile. Its far too easy to get swept away with what seems like an irrational market at present and for some the EIIS is a compelling product for those who want a reasonable return where capital preservation is an important factor.

Jim2007

The rate of 12% does not include the tax relief of 40%. When you add the two together i think it was a decent return.

Is the 96% you refer to below before or after tax?

No matter how you mix it, it will not come up to almost doubling your income at a lower risk.

Nermal

Jim2007 wrote: »

The annualized return on the S&P 500 over the same period was about 14.5% and the total return was 96%.

If you want to invest in a distillery that is one thing. But if you want to accumulate wealth, it was a lousy scheme in which you took on significantly more risk than required and achieved a poor rate of return in doing so.

€100 invested in the EIIS scheme referred to, with a 12% PA return, less 33% CGT plus the 40% relief returns €191.

€100 in the S&P 500 with a total return of 96% over the same period, taxed at 41% returns €157.

Take a moment to fire up Excel next time before you post.

duffysfarm

True, but this thread is on EII. If you want to start blowing about how good American shares are then go ahead and start a thread on it

Jim2007 wrote: »

No matter how you mix it, it will not come up to almost doubling your income at a lower risk.

Jim2007

Nermal wrote: »

€100 invested in the EIIS scheme referred to, with a 12% PA return, less 33% CGT plus the 40% relief returns €191.

€100 in the S&P 500 with a total return of 96% over the same period, taxed at 41% returns €157.

Take a moment to fire up Excel next time before you post.

The OP said 12% not PA.....

Jim2007

duffysfarm wrote: »

True, but this thread is on EII. If you want to start blowing about how good American shares are then go ahead and start a thread on it

And this is forum on investing.... and most of the companies in the S&P are multi nationals and the index is widely available.

duffysfarm

I am not the op mr know it all

Jim2007 wrote: »

The OP said 12% not PA.....

Water John

The ROI on an EII are usually a total for the duration not an annualised figure. So 40 tax relief + 12% (in this case), total IWT. Don't think anyone would have forecast such a long bull run on the stock market.

Nermal

Jim2007 wrote: »

The OP said 12% not PA.....

Fair enough - but don't forget, an EIIS investor now gets their full 40% tax relief at the end of year one.

Whatever alternative five-year investment you propose for your €100, I can put €40 in for four of those years.

If the EIIS scheme returns 12% total, your alternative ETF needs to return 115%, just to match it, and I'm not counting CGT allowance in there, by the way. It's a big ask.

Cute Hoor

Nermal wrote: »

Whatever alternative five-year investment you propose for your €100, I can put €40 in for four of those years.

This is the key comment I think, you have that €40 guaranteed pretty much immediately to spend/invest as you wish, while the rest matures away in those sweet smelling casks/vats.

alanceltic

The calculations above are missing the point that the 40% return is front loaded.

Even if the overall return is 12% for the 4 year period it yields an impressive 86% overall return because you should be deducting to 40% off the initial investment rather than adding it to the final returns!

Holds up very impressively against the current irrational market on a good day... How do you think this will compare against future markets returns. I'm no Mystic Meg but the risk reward is hard to ignore in any language.

Cute Hoor

Obviously there is risk (significant in some cases) when investing in an EIIS business, risk of course with any investment. A Davy/BDO EIIS fund invested €2.5m in Nephin Irish Whiskey in 2019. I think Nephin had raised EIIS funding previously as well. According to a report in today's SBP Nephin is now bedevilled by internal wrangling, with a director resigning last week, AGM delayed, and when AGM eventually held a crucial vote on the composition of the 5 member board will feature, if carried it would mean that board members cannot be married to each other. To date no whiskey has been distilled and it is a year behind schedule. Hopefully everything works out fine in the end but not what an investor would want to be seeing/hearing.

Philbert

alanceltic wrote: »

The calculations above are missing the point that the 40% return is front loaded.

Even if the overall return is 12% for the 4 year period it yields an impressive 86% overall return because you should be deducting to 40% off the initial investment rather than adding it to the final returns!

Exactly, and I think most people, including some accountants(!) I have worked with seem to miss this point. Even if you were to just get your capital back on a €10k investment the rate of return is actually 67%, not 40%.

How so? The cost of your investment is not €10k, it is €6k. You take €10k out of your bank account, and the Revenue simply put €4k back in, leaving €6k at risk. For this investment of €6k you are getting €10k back a few years later (assuming no premium) which reflects a ROI of 67% and furthermore none of the return is subject to any CGT.

Of course most EIIS schemes offer more than your money back, which is subject to CGT. And all EIIS investments carry risk, some more than others.

alanceltic wrote: »

Holds up very impressively against the current irrational market on a good day... How do you think this will compare against future markets returns. I'm no Mystic Meg but the risk reward is hard to ignore in any language.

Agreed. Full disclosure; my company is running an EIIS scheme this year, having successfully returned a BES scheme (EIIS predecessor) in the past. PM me with your contact details for anyone interested and I'll send you details when its ready.

Valhallapt

I have had some good gains from the stock market this year. I need to liquidate them as I am raising funding for my new startup. My startup qualifies as an EII company, can I invest my own money via EII and offset a CGT bill on the gains from the stock market?

Philbert

Valhallapt wrote: »

I have had some good gains from the stock market this year. I need to liquidate them as I am raising funding for my new startup. My startup qualifies as an EII company, can I invest my own money via EII and offset a CGT bill on the gains from the stock market?

No, not through EII. But if you are leaving PAYE employment to start a new company then SURE might apply. Note that there are 98 pages of T's & C's so make sure to read them all

Valhallapt

Philbert wrote: »

No, not through EII. But if you are leaving PAYE employment to start a new company then SURE might apply. Note that there are 98 pages of T's & C's so make sure to read them all .

I'm not PAYE, so I guess I can't back myself, but a stranger can!

Water John

Not sure but any income tax paid over the last 3 years can be clawed back in some way TMK as part of a start up. Not sure it has to be PAYE.

Another possible source of funds is Leader in rural areas. Think the rate is going up in April. Scratching the back of my brain for some of these possible options. Be sure to chat to your Local Enterprise Board.

Valhallapt

Water John wrote: »

Not sure but any income tax paid over the last 3 years can be clawed back in some way TMK as part of a start up. Not sure it has to be PAYE.

Another possible source of funds is Leader in rural areas. Think the rate is going up in April. Scratching the back of my brain for some of these possible options. Be sure to chat to your Local Enterprise Board.

Unfortunately SURE is explicitly PAYE only.

caviardreams

EIIS Cloud Migration opportunity on page 4 of the Business Post today - advertised via Kevin Canning in Quintas.ie

One More Toy

caviardreams wrote: »

EIIS Cloud Migration opportunity on page 4 of the Business Post today - advertised via Kevin Canning in Quintas.ie

Can't see it on the website anywhere?

Cute Hoor

One More Toy wrote: »

Can't see it on the website anywhere?

According to SBP
For further details contact: kevin.canning@quintas.ie

Ush1

Threw a few bob into Kinsale Spirits. I'll let you know how it goes.

Darc19

Jim2007 wrote: »

The annualized return on the S&P 500 over the same period was about 14.5% and the total return was 96%.

If you want to invest in a distillery that is one thing. But if you want to accumulate wealth, it was a lousy scheme in which you took on significantly more risk than required and achieved a poor rate of return in doing so.

People need to track and benchmark performance to know how they are doing.

Don't forget to factor in exchange rates too. Us dollar was $1.05-$1.10 for much of latter half of 2016. It's close to $1.20 now, so deduct about 12% from your overall s&p returns for the euro value

Officer Giggles

Ush1 wrote: »

Threw a few bob into Kinsale Spirits. I'll let you know how it goes.

Do you have to buy through a third party or how does it work. Wasn't clear from what I seen on Google. Thanks

Ush1

Officer Giggles wrote: »

Do you have to buy through a third party or how does it work. Wasn't clear from what I seen on Google. Thanks

I went through a broker, Alpha Wealth in Cork. They charge a 3 percent on the investment fee. Fund transfer directly into Kinsales account though.

Officer Giggles

Ush1 wrote: »

I went through a broker, Alpha Wealth in Cork. They charge a 3 percent on the investment fee. Fund transfer directly into Kinsales account though.

They were the only company that came back for Kinsale when I looked on Google alright. Thanks.

rebelle

Ush1 wrote: »

I went through a broker, Alpha Wealth in Cork. They charge a 3 percent on the investment fee. Fund transfer directly into Kinsales account though.

Officer Giggles wrote: »

They were the only company that came back for Kinsale when I looked on Google alright. Thanks.

I also went through Alpha Wealth to invest in an EIIS last year.

rocketspocket

Any talk as to when you will get the tax certs from kinsale?