The Federal Treasury has introduced legislation which aims to create tax incentives for investors by encouraging early stage investment in startups (Bill).

The Bill aims to increase the volume of funding available for startups by offering the following tax concessions to potential investors:

  1. a non-refundable tax offset equalling 20% of the total amount invested in an innovation company or fund (capped at $200,000 per financial year); and
  2. a 10 year CGT exemption on capital gains made on the sale of shares in an innovation company provided that the shares are held for at least 3 years.

Treasury has indicated that the incentives will apply from 1 July 2016.  

The Bill follows the Government’s request for submissions from stakeholders in its February policy discussion paper, “Tax Incentives for Early Stage Investors”. The request for submissions arose from industry concerns that potential investors may wish to postpone investments until the concessions are in place.

More detail on the Bill can be found here.

For further information or advice please contact:

Ashleigh Wall
Special Counsel
Harwood Andrews
T: 03 5226 8559

Laura van Stekelenburg
Harwood Andrews
T: 03 5225 5205