Prime Minister Malcolm Turnbull’s pre-Christmas unveiling of the National Innovation and Science Agenda promises to encourage Australia’s ‘give it a go’ culture.
The $1.1 billion plan includes:
- helping businesses embrace risk
- incentivising early stage investment in start-ups
- increasing collaborations between businesses, universities and researchers so that great ideas become commercial solutions
- training and skilling our young people for the jobs of the future and attracting the world’s most innovative talent to call Australia home.
Several tax measures are included in this package, expected to come into play for the 2016-2017 financial year:
- 20% non-refundable tax offset for investments in start-up companies, capped at $200,000 per investor per year
- capital gains tax exemption for investments in start-up companies held for between 3 and 10 years
- modifications to the same business test to allow companies to utilise prior year losses in cases where minor changes have been made to the company’s business
- taxpayer self-assessment of the effective life of intangible assets (e.g. intellectual property).
While the precise scope of concessions has yet to be clarified and legislative changes are needed to realise some of the announcements, Moore Stephens New South Wales has reason to be very hopeful for our clients.
We know Australians are innovative, spirited and ingenious.
We see that in people we represent: like Solar Development Pty Ltd and its world-first, and we’ll go so far as to say life-saving, product that stops solar panels working.
Why stop solar panels from working? Currently when there’s a short circuit, a fire or flood, there is no quick safe way to disable solar panels either remotely, manually or automatically: the panels keep generating potentially lethal DC voltage.
Our client’s newly-patented product, PV Stop, deactivates solar panels in seconds safely. What an advantage that presents for electrical contractors and fire and rescue personnel!
We’re hopeful the federal government’s innovation proposals will prove a similar benefit to clients like Solar Development.
- With the capital gains tax exemption, it will be more attractive for clients like Solar Development to get funding and investors.
- Investors will also receive a 20% non-refundable tax offset on their investment.
- Self-assessment of intangible asset depreciation such as the effective life of patents, may realise larger tax deductions.
If you have any questions about how the innovation proposals could affect you as an investor or innovator, contact Adam Dyson and his team on +61 2 8745 3433 and grow the possibility.