Investment Structure

A management company will be set up to manage the estate aspects of the development.  An individual who purchases a retirement home will join this management company which will be owned 100% by the retirement home owners.  The retirement homes will be leased to a subsidiary of the nursing home, prior to purchase.  The lease will be a minimum, 10 year lease.  The lease rent is set at €5,000 per     annum and the subsidiary will also pay the estate cost including    insurance under the lease.  This represents a saving of €1,500 per annum for the owners. 

The tax life of the retirement homes is 10 years and allowances will be clawed back if the retirement home is sold or ceases to be used as a retirement home within 10 years.  The marketing and letting of this development will be undertaken by the nursing home.  It will be     responsible for the management of the retirement homes and the provision of services to the occupants. 

Year       Bld Allowance(15% p.a.)                     Fit Out(12.5% p.a.)                   Total

 1            €51,375                                                      €875                               €52,250

  2            €51,375                                                      €875                               €52,250 

 3            €51,375                                                      €875                               €52,250

 4            €51,375                                                      €875                               €52,250

 5            €51,375                                                      €875                               €52,250

 6            €51,375                                                      €875                               €52,250

 7            €34,250                                                      €875                               €35,125

 8            …….                                                          €875                                    €875

             €342,500                                                    €7,000                             €349,500

At 47%:  €160,975                                                   €3,290                             €164,265

The purchase price of the Site And Building is €375,000. Of this,    approximately €342,500 qualifies for Tax Relief over 7 years as     detailed above. The full cost of the Fit Out of €7,000 incl. VAT    qualifies for Tax Relief over 8 years at 12.5% p.a.