The Minister for Finance, Mr McCreevy, has announced amendments to the transitional arrangements relating to restrictions on capital allowances and business expansion schemes (BES) included in the Budget.
The transitional arrangements were made for projects that were well advanced on Budget day. They are being amended to address the genuine and unintended difficulties that they have caused for some projects and companies, Mr McCreevy said.
In his Budget speech, he announced that the aggregate amount a company could raise under the BES was being reduced to £250,000 from £1 million.
To satisfy the transitional arrangements designed to cater for projects that were well advanced prior to the Budget, shares in a company raising its own funds had to be issued before June 30th, 1998; the company had to prove to the Revenue Commissioners that it intended to raise the money under the BES before Budget day; and companies needed to have binding contracts in place committing them to spend at least 25 per cent of the money they intended raising.
Mr McCreevy is allowing any project that certified prior to December 3rd, 1997 by a development agency such as Forbairt to raise the finance certified. The need for binding contracts will no longer apply in these cases.
Mr McCreevy has also decided to extend the deadline for the issue of shares to investors to September 30th from June 30th, 1998.
In a separate amendment, the Minister has decided to allow seed capital projects to raise £500,000 provided no more than £250,000 of this is raised under the BES.
Mr McCreevy also announced amendments to the transitional arrangements relating to restrictions on capital allowances.
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