Fears new CGT update could hit innovative startups that change direction
Ai Group fears for investors in pioneering startups that eventually change strategy, with those shares losing key tax concessions.
An expanded plan to shield startup investors from hefty capital gains tax (CGT) bills still does not go far enough, with consequences for innovative ventures that evolve over time, warns the Australian Industry Group.
Treasurer Jim Chalmers this month unveiled draft plans to broaden its innovative business CGT concession (IBCC), which would protect investors in pioneering startups from a 30% minimum tax on capital gains, applied through a new indexation model.
Investors in businesses eligible for the IBCC would instead use the existing 50% CGT discount rules, potentially resulting in a smaller tax bill when selling their shares than under the new system.
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