A group of 12 tax partners will be admitted to the ‘Ennis Nursing Home Partnership’ with a view to acquiring the property and availing of the relevant tax reliefs. The tax partners will join the property partner in the acquisition of Ennis Nursing Home. Participating tax partners will benefit from significant tax savings and a substantial return on their investment over 10 years. The property partner will not avail of the capital allowances attaching to the properties.

The ‘Ennis Nursing Home Partnership’ will acquire a 60-bed purpose built facility. The acquisition cost of the nursing home is €7,121,000 and includes all associated professional and legal fees.

The acquisition will be funded through a combination of partnership bank borrowings (€5,441,000) and tax partner equity of €1,680,000 (€140,000 x 12). Partnership bank borrowings are non recourse to participating investors in respect of the capital element (i.e. €5,441,000).

Each tax partner will benefit from capital allowances of €502,190 generating a total tax saving of €205,898 (@41%) over the investment period. The capital allowances are available as follows:

*Rental Income Capital Allowances and losses may be claimed as they arise and may be carried forward if unused against Irish Rental Income.

Each tax partner will also receive a repayment of capital of €145,000 after 10 years and will formally retire from the Partnership after 15 years. This investment generates a projected compound return of 14% p.a. over a 10 year term.

Guaranteed Repayment of Capital after 10 Years

The Tax Partners will enter into an arrangement at the outset whereby the Property Partner will undertake to facilitate a repayment of capital to each partner at the end of 10 years.

The guaranteed payment amounts to €1,740,000 (€145,000 per Partner) and will be documented in the Partnership Agreement. The repayment of capital is secured by Guarantee from the Property Partner.

Retirement from the Partnership after 15 Years

The Tax Partners will also enter into an arrangement at the outset whereby each Tax Partner will retire from the Partnership after 15 Years, at the end of the tax life of the Nursing Home. This retirement provision will be documented in a ‘Partnership Agreement’ between the Tax Partnership and the Property Partner.