Budget 2024 : What’s new for Irish Angel Investors

Budget 2024 represents concrete progress on key policies for Irish startups and investors alike.

It's clear that Budget 2024 is tuned into the pulse of the angel investor community with two key policy changes working synergistically together to make it more attractive for a private individual to invest in startups. 

• Firstly, the introduction of a new Capital Gains Tax (CGT) Relief specifically targeting angel investors is a milestone. What this means is, angel investors can now benefit from a reduced CGT rate for gains up to twice the value of their qualifying investment in innovative startups. 

• The second key update is improvements to the Employment Investment Incentive Scheme or EIIS. This scheme has been the go-to for angel investors looking to support Irish startups. The investment period has been standardised to four years, simplifying the terms for investors. Even more significant, the cap on the relief amount has been doubled to €500,000 for four-year investments. This allows angel investors to invest more capital and in turn, amplifies their ability to back more promising ventures.

It's also heartening to note that even though the budget didn't explicitly address the simplification of the EIIS process, Minister McGrath has recognised the need for a review in early 2024. We eagerly anticipate the opportunity to collaborate and contribute to this review.

Alongside these improvements for angel investors, we have the significant doubling of the first-year payment threshold for R&D tax credits, improving cash flow for companies, and is particularly beneficial for startups and SMEs where cash flow can be a significant constraint. 

HBAN made a submission to supplement the ScaleIreland submission, and their work has been instrumental to today's outcome. We were delighted to have been asked by the Department of Finance for further information on our submission which leveraged the insights from over 100 angels in our network.

There is still some changes we’d like to see before Ireland has an angel policy environment matches that of International counterparts like the UK, but today represents good progress.