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Tax incentives for early stage investors

By WSC Group | Created on September 3, 2024
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The ATO is reminding investors who purchased new shares in a qualifying 'early stage innovation company' ('ESIC') that they may be eligible for tax incentives.

These tax incentives provide eligible investors who purchase new shares in an ESIC with:

  • a non-refundable carry forward tax offset equal to 20% of the amount paid for their eligible investments – this is capped at a maximum tax offset amount of $200,000 for the investor and their affiliates combined in each income year; and
  • modified capital gains tax ('CGT') treatment, under which capital gains on qualifying shares that are continuously held for at least 12 months and less than 10 years may be disregarded – capital losses on shares held less than 10 years must be disregarded.

The maximum tax offset cap of $200,000 does not limit the shares that qualify for the modified CGT treatment.

Note: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.

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