Does anyone know if this is true? And if yes hope do you apply and what can these funds be used for
I had never heard of that. How long has it been in existence?
The benefit in most situations is illusory. You have to commit your funds to share capital which is almost impossible to access without an expensive liquidation.
And you're paying tax on your drawings from the company from the get-go, even when you're still out of pocket in net terms.
Get professional advice before making any irrevocable decisions here.
but I can assure you the cheque I received from Revenue wan't illusory!
Of course it wasn't but neither were the PAYE/PRSI/USC debits you made on your initial salary from the company, while you were still out of pocket in net terms. Swings and roundabouts.
You seemed more than a little dismissive of it though, which I don't think is warrented: it can work for some people; I doubt I'm alone in having greatly benefitted from it.
The benefit in most situations is illusory.
A couple of years later and the company has more than the original investment sitting in a bank account (waiting to be used for expansion investment), after having drawn a reasonable salary in the meantime, though it was nerve wracking in the early months when the cash went almost to zero. That is, I'm in the happy position of having the investment payed off.
Ah come on, I did say at the outset:
What has happened is that you've gotten tax relief on your original investment, but had to pay tax on the withdrawal of that investment from the company, which had to be in the form of salary. Which is pretty much the same thing as lending to the company at the outset and enjoying tax-free withdrawals of that sum until the full amount was repaid.
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