CGT discount threshold for startups drops to 50% in revised bill
The revised bill lowers the innovative business test. Now it requires more than 50% of company activities to be innovative. The old draft required more than 75%.
The government introduced new tax rules for startup founders, employees and investors to parliament on Tuesday. The Innovative Business CGT Concession gives a 50% discount on capital gains from qualifying share investments.
The original draft set a high bar. At least more than 75% of a company's assets, employees and income had to relate to innovative work.
The revised bill lowers that to more than 50%. This makes it easier for growing startups to keep the discount.
They can do this as they hire and diversify. The test uses the most recent financial year as a reference point.
Temporary staffing changes won't instantly disqualify companies. New firms without a prior financial year are assessed on reasonable expectations.
The holding period stays at three years. The R&D tax incentive also gains a ministerial power.
This allows the Treasury minister to identify activities that are key to experimental research. The minister consults with the industry minister first.
- 50%
- CGT discount
- more than 75%
- Original threshold
- more than 50%
- Revised threshold
- three years
- Holding period
Why it mattersEasier eligibility reduces risk for startup founders and early investors. They worry less that their tax discounts will disappear as the company grows. This encourages more people to invest in new ventures.
AustraliaAustralian startups can now build and scale more flexibly without losing tax breaks, potentially lifting investment in young tech and biotech firms.
✓ Claims checked against the source and corrected before publish. checked 3 h ago
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