ESIC Audit Assistant (Record Keeping Guide)

Preparing for an ESIC Audit

Audit happens, so it pays to be prepared. To the ATO your lucky investment gain is another revenue stream, which typically attracts Capital Gains Tax.

The law requires investors to carry significant records to back up the claim, which may occasion a tax bill many times more than the original investment.


  • The investor must pass audit, not the ESIC.
  • Failure on any point will invalidate the claim
  • Time may prejudice your claim
  • Reconstruction of records may be difficult or impossible 
  • Many tests are subjective 
  • Commercially sensitive information is often necessary 


Preparing for an ESIC Investment

The moment has come and you are about to invest in a highly speculative company, that claims to be ESIC eligible, tax should be far from your mind though the lure of the tax offset and CGT relief is something you'd prefer not to miss out on. 

In our experiance founders often jump to the conclusion that the company is ESIC when the basis of the claim is on shakey ground. If you do not have a favorable ATO ruling then you must assume the company does not qualify untill you hold reliable records sufficient to prove otherwise. 


  • Do an Investor Assessment and make sure you are not an excluded investor
  • Apply the annual retail investment cap (if applicable)
  • Get records from the company (Guide below)
  • Confirm that the company is lodging notification with the ATO
  • Advise your tax agent to claim the offset
  • Keep an ESIC file for each company / investment


ESIC Audit Assistant

The ESIC Auto Assistant aims to help educate you on the records you may need in the event of ATO review. It has been devised based on private ruling assessments, ATO guides and practice. It is not meant as a comprehensive or definitive guide, though may prove to be invaluable for investors who are otherwise unsure of the type of information necessary to support a claim:

TIP:   ESIC's founders are invariably busy, so try to secure the information from documents they have to hand, e.g. a business plan may also include a sufficiently detailed 'go-to-market strategy', so you need not obtain both.