Waterford Nursing Home - Asset Backed All Income and Rental Income Shelter
Status: Closed 2003

Investor Benefits

• Tax Partnership Share Equity €113,000
• €220,038 allowance over 7 years against All Income
• €108,401 allowances over 7 years against Rental Income
• Exit payment of €100,000 guaranteed in Year 10
• Strong Covenant with Mowlam Healthcare, Ireland's leading Nursing Home operator.
• IRR of 28%
• Guaranteed Rental income of €272,250 funds all partnership borrowing requirement
• Partnership borrowings are on a non-recourse basis to the tax partners.

Waterford Nursing Home is a 60-bed purpose built facility, designed to cater for the individual needs of residents with a wide range of requirements. All residents will be accommodated in single or double rooms with en-suite facilities. The home will be operated by Mowlam Healthcare Limited, the leading Nursing Home operator in Ireland who is committed to providing a caring professional service to local communities with the highest standards of personalised nursing and residential care.

A group of 13 investors will be admitted to the Partnership with a view to acquiring the nursing home and availing of the relevant tax reliefs. The Partnership is known as the Waterford Nursing Home Partnership. Individual partners equity contributions of €113,000 together with Partnership bank borrowings of €3,730,000 will be utilised to fund the acquisition of the nursing home.

The Partnership will grant a full repairing and insuring lease to the Operator for a period of 9 years and 11 months, who will manage and operate the nursing home. The Operator will pay a fixed annual rent to the Partnership of €272,250. Individual partners will benefit from the following tax reliefs over a seven-year period

The Operator must lodge a deposit of €305,000 with the Partnership's solicitors at the outset as security that the Operator will comply with its obligations under the lease. If the Operator has fully complied with the terms of the lease this deposit will be returned to the Operator at the end of year 10.

The Partnership will also enter into an agreement, obliging the Operator to acquire the Partnership's interest in the nursing home for a fixed price of €5,050,000 at the end of year 10. These funds will be used to discharge the Partnerships bank borrowings of €3,730,000 used to acquire the nursing home at the outset.

The balance of funds €1,305,000 (€1,320,000 less disposal costs of €15,000) will be discharged equally between the partners. Individual partners will receive approximately €100,000 on exiting the Partnership.