Save
Government removes tax hurdle for start-up investors
The government has moved to strengthen tax incentives available to investors in start-ups, by cleaning up some technical details that were stinging Aussie taxpayers.
Government removes tax hurdle for start-up investors
The government has moved to strengthen tax incentives available to investors in start-ups, by cleaning up some technical details that were stinging Aussie taxpayers.
The government tweaked the National Innovation and Science Agenda (NISA) tax incentives enacted last year, in a bid to provide certainty for investors who are looking to invest in start-ups and certain venture capital arrangements through an interposed trust.
“This [change] ensures that investors are able to access the capital gain concessions provided by the tax incentives for early-stage investors and the new arrangements for venture capital limited partnerships measures,” Minister for Revenue and Financial Services Kelly O’Dwyer said.
BDO’s tax partner Mark Molesworth explained what this would mean for investors.
“The legislation was tidying up a small technical issue with that 10-year capital gains tax holiday, where if that capital gains tax exemption had been earned by a unit trust, then it was likely when that exempt gain was paid out to unit holders, there would be a taxation consequence to those unit holders,” Mr Molesworth said.
“So what the legislation passed yesterday did was to make sure there was no taxation consequence for those unit holders.”
While Mr Molesworth believes the incentives are “a step in the right direction”, he warned investors to ensure that the company they are looking to invest in meets the strict requirements of an early-stage innovation company to take advantage of the tax concessions.
He said unsophisticated investors would be limited to a $50,000 investment, reducing their tax concessions advantage, as compared to the $1 million limit on wholesale investors.
“A wholesale investor is an entity that has more than $2.5 million in assets or income of more than $250,000 a year for the last two years. There are a limited number of them that are around so it’s more of trying to encourage mum and dad investments,” Mr Molesworth said.
“Depending on your point of view, that’s either a good thing because it means mum and dad investors or unsophisticated investors don’t put all of their life savings into a single entity so that’s probably a good social outcome but it does restrict the amount that people can invest in these companies and take advantage of these tax concessions.”
Tax saving
Over 2m Aussies asked the TPB for help during the last year
As the economy recovers, Australia’s tax regulator says it’s planning to put unregistered practitioners under the microscope. ...Read more
Tax saving
Will you pay higher taxes due to bracket creep?
Bracket creep will see Australians paying more tax on average, unless further cuts are introduced in the future. ...Read more
Tax saving
10 ways to reduce your tax bill
With the tax return deadline only one month away, these tips could help minimise your tax bill. ...Read more
Tax saving
Sustainable tax conditions only way forward: OECD
The Australian economy had been on a 28-year winning streak of uninterrupted growth before the pandemic. However, despite a return to lockdowns, the OECD has predicted that winning ways can return sh...Read more
Tax saving
ATO issues warning over new gift card scam
The Australian Taxation Office (ATO) is warning victims of a new phone scam, where scammers are pretending to be the tax man and demanding payments for unpaid tax liabilities. ...Read more
Tax saving
EV uptake set to stall following tax changes
Special EV taxes introduced by state governments are creating a disincentive for Aussies to choose cleaner vehicles and slowing Australia’s overall transition to net zero, new data has revealed. ...Read more
Tax saving
Rooftop solar avoids ‘sun tax’ but still faces caps
Power companies will soon be able to charge Australians with rooftop solar panels a tax for exporting electricity to the grid, albeit the regulators have walked back from the most controversial parts ...Read more
Tax saving
South Australians now eligible for COVID-19 Disaster Payment
South Australians under lockdown are set to be supported by the COVID-19 Disaster Payment, the state government has confirmed. ...Read more
What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now
Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now
Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now
How the post-lockdown period will influence property, what the soaring NFT market means, and defining financial wellness
Listen now
Tax saving
Over 2m Aussies asked the TPB for help during the last year
As the economy recovers, Australia’s tax regulator says it’s planning to put unregistered practitioners under the microscope. ...Read more
Tax saving
Will you pay higher taxes due to bracket creep?
Bracket creep will see Australians paying more tax on average, unless further cuts are introduced in the future. ...Read more
Tax saving
10 ways to reduce your tax bill
With the tax return deadline only one month away, these tips could help minimise your tax bill. ...Read more
Tax saving
Sustainable tax conditions only way forward: OECD
The Australian economy had been on a 28-year winning streak of uninterrupted growth before the pandemic. However, despite a return to lockdowns, the OECD has predicted that winning ways can return sh...Read more
Tax saving
ATO issues warning over new gift card scam
The Australian Taxation Office (ATO) is warning victims of a new phone scam, where scammers are pretending to be the tax man and demanding payments for unpaid tax liabilities. ...Read more
Tax saving
EV uptake set to stall following tax changes
Special EV taxes introduced by state governments are creating a disincentive for Aussies to choose cleaner vehicles and slowing Australia’s overall transition to net zero, new data has revealed. ...Read more
Tax saving
Rooftop solar avoids ‘sun tax’ but still faces caps
Power companies will soon be able to charge Australians with rooftop solar panels a tax for exporting electricity to the grid, albeit the regulators have walked back from the most controversial parts ...Read more
Tax saving
South Australians now eligible for COVID-19 Disaster Payment
South Australians under lockdown are set to be supported by the COVID-19 Disaster Payment, the state government has confirmed. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
