FREQUENTLY ASKED QUESTIONS
The information below is designed to give simple answers to some common questions.
The investment opportunity
According to our financial model which is based on tendered costs, the early year returns should be 5%pa. The return rate increases with RPI over the 20 year life of the project. Interest payments are capped at 5%.
Returns are entirely dependent on the profits earned by Edinburgh Solar. The financial projections used in the Offer document are based on assumptions and the judgement of Energy4All about future performance, but actual outcomes could differ from the projections shown.
EIS Tax Relief on Shares
Edinburgh Solar has received advance assurance from HMRC for the Enterprise Investment Scheme tax relief.
Claiming EIS Tax relief
Once Edinburgh Solar has been generating for four months, Edinburgh Solar will send you an EIS3 form which you will then submit to HMRC. The tax relief can be claimed usually against your Self Assessment tax return for the tax year in which the shares were issued or an adjustment to any Self Assessment payment on account due. You will have to make the claim itself on your tax return when you get it. If you pay your income tax through PAYE you can request a change to your tax code. Claims to relief can be made up to five years after the first 31 January following the tax year in which the investment was made.
We should be in a position to claim EIS forms in December 2016 / January 2017.
For more information please visit www.hmrc.gov.uk/eis
Edinburgh Solar Projected Returns
Each year, after operation and administration costs have been covered, share interest will be paid to members. The return on share capital will be capped at 5%, which will rise with inflation (RPI) each year. The surplus funds generated after payment of share interest will be allocated to the community benefit fund. After year six, members will have some of their share capital paid back each year along with their share interest. By year 20, members will have all their original investment returned and the panels will revert to the Council. All financial detail is provided in the share offer document. You are advised to read this carefully before investing
Will I get my money back?
In accordance with the share offer, it is intended to repay a proportion of the original capital after 3 years with the remainder progressively each year until the end of the project in year 20.
Will the Co-op get involved in other activities?
Edinburgh Solar is a Benefit for the Community Society and the project will enable the creation of a community fund, estimated to be approximately £1 million over the life of the project. Edinburgh Solar is open to suggestions from Members on taking on other projects. Members will decide if other projects are to be developed.
Can I get my money out early?
Currently, Members do not have the right to withdraw Shares and no withdrawals will be permitted during the EIS period (three years) as this could prejudice the tax relief for all Co-op Members. However, the Board has discretion to permit Shares to be withdrawn at a later date and in accordance with any conditions the Board may decide.
When will I get my first payment?
Payments must be approved by Co-op members at the AGM and share interest payments will be due after the AGM, following construction during year one. The financial year ends on 30th September, therefore the first payments will probably be in June 2017 and regularly at annual intervals after that.
What happens if I die?
A member’s shares in the Co-op are treated just like any other asset if someone dies.
What are the environmental benefits?
Each installation will result in a reduction of CO2 emissions which will help the schools meet their sustainability targets. We are also hoping it will encourage more awareness of energy, both generation and energy efficiency, within the local community.