50,001 unhappy returns

2017-11-21 13:02:37


If you are like most of us, a retail investor you'll be thinking that $50,000 is a lot of money and looking at the annual cap as a non-issue.

Maybe a rights issue, scond or 3rd investment comes along and you are not so sure.

Often angel rounds have a minimum buyin at $50k so your capped out in a single transaction. So what, your thinking clever me I've claimed $10k back and a have a tidy little CGT. exemption up my sleeve.

Don't be so sure, particularly if your prone to take an option or 2 on the side.

The legislation is quite ruthless when it comes to retail investors, 50k is it, one cent more and your entitlements are extinguished, including the CGT exemption.

The 50k includes all ESIC's so you will have to consider all other investments made that year. Perhaps your $1 founder share in your own startup will push you over the threshold? perhaps another investment that you assess as non eligible is assessed by others as an ESIC and the ATO agree.

You can be sure that 20:20 hindsight will catch wary and unwary advisors off guard, and perhaps our directory or updates could help you avoid a nasty audit surprise!

May 50,000 blessings be upon you,


Published By: Tom