ESIC startup tax news
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Transcript of ESIC startup tax news
DISCLAIMER
This is merely a slideshow for entertainment purposes and to share my personal excitement for this tax incentive for investment in startups in Australia. I am not qualified to give tax advice and it should not be construed to be tax advice. I researched The Australian Government’s Treasury website www.treasury.gov.au and turned the information into a slideshow. Any of the information is general in nature. People should seek professional advice in relation to their own unique circumstances and certainly not rely on any information in this slideshow. This slidehow is being made on 5 December 2016. The information may not be current in the future.
EarlyStageInnovation Company?
Check Treasury’s Website
for all the details.
See next 5 slides for summary.
EarlyStageInnovation Company?
● Not listed on any stock exchange● Incorporated in Australia● Satisfies innovation tests
EarlyStageInnovation Company?
● Not listed on any stock exchange● Incorporated in Australia● Satisfies innovation tests
In prior income year:
● Expenditure $1 million or less
EarlyStageInnovation Company?
● Not listed on any stock exchange● Incorporated in Australia● Satisfies innovation tests
In prior income year:
● Expenditure $1 million or less● Assessable income $200k or less
The investor?
● invests in a qualifying ESIC
● is not a widely-held company; and
● is either:
○ sophisticated investor
Sophisticated investor?
● a legal person controlled by an
individual considered a
sophisticated investor pursuant
to subsection 708(8) of the
Corporations Act 2001
The investor?
● invests in a qualifying ESIC
● is not a widely-held company; and
● is either:
○ sophisticated investor; or
○ a non-sophisticated investor
that has invested $50,000 or
less in the income year.
Non-sophisticated
Non-sophisticated investors BEWARE!
Invest >$50,000
There is a $50k limit to prevent too much money being risked
Non-sophisticated
Non-sophisticated investors BEWARE!
Invest >$50,000
There is a $50k limit to prevent too much money being risked
All benefits are lost
DON’T LET THIS HAPPEN
The tax breaks?INCOME TAX
● 20% tax credit
● This is a non-refundable carry
forward tax offset
● Capped at $200,000
The tax breaks?CAPITAL GAINS TAX
● A 10 year exemption on capital
gains tax for investments held as
shares in an ESIC for at least 12
months, provided that the shares
held do not constitute more than
a 30 per cent interest in the ESIC
The tax breaks?CAPITAL GAINS TAX
● A 10 year exemption on capital
gains tax for investments held as
shares in an ESIC for at least 12
months, provided that the shares
held do not constitute more than
a 30 per cent interest in the ESIC
● So this could apply to
entrepreneurs themselves
There’s more● As you would expect, there is
more small print, so it is time to
make your own enquiries
Benefits● More funding for startups
● Another option for investors
● And who doesn’t like a tax break
Next steps
Examine any startups with extreme cautionGet your own adviceProceed with care
Remember, this is general information, current in Australia on 5 December 2016.
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