File #2726: "2019_Book_IncentivisingAngels.pdf"
Text
1|Acknowledgements|6
1|Contents|7
1|About the Authors|9
1|Abbreviations|10
1|Chapter 1: Establishing a Comparative Framework of Tax Incentives for Start-Up Investors|11
2|1.1 Introduction|12
2|1.2 Venture Capital|13
2|1.3 Early Stage Investor Program|14
2|1.4 Aim and Structure of this Book|16
2|References|18
1|Chapter 2: Innovation, Start-Ups and Venture Capital|20
2|2.1 Introduction|20
2|2.2 Australia and the Global Innovation Race|23
2|2.3 Start-Up Companies as Drivers of Innovation|25
3|2.3.1 Contrasting Start-Ups with Other Small Businesses|26
3|2.3.2 Contrasting Start-Ups with Large Businesses|26
2|2.4 The Nature of Venture Capital|27
2|2.5 Angels and Venture Capitalists|28
3|2.5.1 Similarities Between Angels and Venture Capitalists|29
3|2.5.2 Differences Between Angels and Venture Capitalists|30
2|2.6 Conclusion|33
2|References|33
1|Chapter 3: Australia’s Formal Venture Capital Tax Incentive Programs|37
2|3.1 Introduction|38
2|3.2 Australia’s Formal Venture Capital Tax Incentive Programs|39
2|3.3 MIC and PDF Programs|40
2|3.4 VCLP and ESVCLP Programs|43
2|3.5 Conclusion|46
2|References|47
1|Chapter 4: Australia’s Early Stage Investor Program|48
2|4.1 Background|49
2|4.2 Early Stage Innovation Companies|50
3|4.2.1 Early Stage Requirements|50
3|4.2.2 Innovation Requirements|54
4|4.2.2.1 100 Point Test|54
4|4.2.2.2 Principles-Based Test|63
3|4.2.3 Critique of the Innovation Requirements|64
3|4.2.4 Tax Rulings|68
2|4.3 Tax Offset|71
3|4.3.1 Amount of Tax Offset|72
3|4.3.2 Restriction on Investments Made by Retail Investors|73
3|4.3.3 Flow Through of the Tax Offset for Members of Trusts and Partnerships|76
2|4.4 Modified CGT Treatment|78
2|4.5 Reporting Obligations|81
2|4.6 Diagrams Illustrating the Operation of the ESI Program|82
2|4.7 Conclusion|83
2|References|84
1|Chapter 5: United Kingdom’s Seed Enterprise Investment Scheme|87
2|5.1 Background|88
2|5.2 The Risk-To-Capital Condition|90
2|5.3 Investor Requirements|90
2|5.4 General Requirements|92
2|5.5 Company Requirements|93
3|5.5.1 Point-In-Time Requirements|93
3|5.5.2 Ongoing Requirements|94
3|5.5.3 Absence of Specific Innovation Requirements|96
2|5.6 Income Tax Relief|97
2|5.7 CGT Relief|98
2|5.8 Loss Relief|100
2|5.9 Reinvestment Relief|101
2|5.10 Conclusion|102
2|References|103
1|Chapter 6: Suggestions for Reforming Australia’s Early Stage Investor Program|105
2|6.1 Introduction|105
2|6.2 Providing Innovation and Science Australia with the Power to Make Rulings|106
2|6.3 Allowing Capital Losses|107
2|6.4 Introducing Reinvestment Relief|109
2|6.5 Extending the Incentive to Investment in Later Stage Companies|109
2|6.6 Removing the 10 Year CGT Limit|110
2|6.7 Conclusion|111
2|References|112
1|Appendix: ESI Program Legislation|114
1|Index|123
1|Contents|7
1|About the Authors|9
1|Abbreviations|10
1|Chapter 1: Establishing a Comparative Framework of Tax Incentives for Start-Up Investors|11
2|1.1 Introduction|12
2|1.2 Venture Capital|13
2|1.3 Early Stage Investor Program|14
2|1.4 Aim and Structure of this Book|16
2|References|18
1|Chapter 2: Innovation, Start-Ups and Venture Capital|20
2|2.1 Introduction|20
2|2.2 Australia and the Global Innovation Race|23
2|2.3 Start-Up Companies as Drivers of Innovation|25
3|2.3.1 Contrasting Start-Ups with Other Small Businesses|26
3|2.3.2 Contrasting Start-Ups with Large Businesses|26
2|2.4 The Nature of Venture Capital|27
2|2.5 Angels and Venture Capitalists|28
3|2.5.1 Similarities Between Angels and Venture Capitalists|29
3|2.5.2 Differences Between Angels and Venture Capitalists|30
2|2.6 Conclusion|33
2|References|33
1|Chapter 3: Australia’s Formal Venture Capital Tax Incentive Programs|37
2|3.1 Introduction|38
2|3.2 Australia’s Formal Venture Capital Tax Incentive Programs|39
2|3.3 MIC and PDF Programs|40
2|3.4 VCLP and ESVCLP Programs|43
2|3.5 Conclusion|46
2|References|47
1|Chapter 4: Australia’s Early Stage Investor Program|48
2|4.1 Background|49
2|4.2 Early Stage Innovation Companies|50
3|4.2.1 Early Stage Requirements|50
3|4.2.2 Innovation Requirements|54
4|4.2.2.1 100 Point Test|54
4|4.2.2.2 Principles-Based Test|63
3|4.2.3 Critique of the Innovation Requirements|64
3|4.2.4 Tax Rulings|68
2|4.3 Tax Offset|71
3|4.3.1 Amount of Tax Offset|72
3|4.3.2 Restriction on Investments Made by Retail Investors|73
3|4.3.3 Flow Through of the Tax Offset for Members of Trusts and Partnerships|76
2|4.4 Modified CGT Treatment|78
2|4.5 Reporting Obligations|81
2|4.6 Diagrams Illustrating the Operation of the ESI Program|82
2|4.7 Conclusion|83
2|References|84
1|Chapter 5: United Kingdom’s Seed Enterprise Investment Scheme|87
2|5.1 Background|88
2|5.2 The Risk-To-Capital Condition|90
2|5.3 Investor Requirements|90
2|5.4 General Requirements|92
2|5.5 Company Requirements|93
3|5.5.1 Point-In-Time Requirements|93
3|5.5.2 Ongoing Requirements|94
3|5.5.3 Absence of Specific Innovation Requirements|96
2|5.6 Income Tax Relief|97
2|5.7 CGT Relief|98
2|5.8 Loss Relief|100
2|5.9 Reinvestment Relief|101
2|5.10 Conclusion|102
2|References|103
1|Chapter 6: Suggestions for Reforming Australia’s Early Stage Investor Program|105
2|6.1 Introduction|105
2|6.2 Providing Innovation and Science Australia with the Power to Make Rulings|106
2|6.3 Allowing Capital Losses|107
2|6.4 Introducing Reinvestment Relief|109
2|6.5 Extending the Incentive to Investment in Later Stage Companies|109
2|6.6 Removing the 10 Year CGT Limit|110
2|6.7 Conclusion|111
2|References|112
1|Appendix: ESI Program Legislation|114
1|Index|123