Employment Investment Incentive EIIS tax relief

[mikester]

Evening

Regarding EIIS and tax relief. What is the maximum relief one can take in situation where a person invests in PRSA AVC pension and claims relief there also? For example one invests €500 a month in PRSA (€6000 in year) and claims back 40% relief of €2400. If this person also wishes to invest in EIIS with tax relief of 40%, and person pays €11,000 of PAYE tax a year, does this mean one can claim a maximum relief of €8600 (€11000 - €2400)? Therefore maximum EIIS investment of €21,500 (€8600 / 0.40 )?

Does this sound correct and in accordance with revenue rules?
Thanks
Michael

 

[conor_mc]

I don’t think the relief is dependent on your tax rate, but on the EIIS investments themselves at either 20%, 35% or 50%.

So in theory, if the investments qualify for 50% relief, you could/should only invest €17,200 to get relief of €8600.

At 35%, you could/should only invest (8600 / 0.35) =24,571.