Description of the core change(s) brought by this policy instrument
Provides a tax incentive (income tax reduction and capital gains tax exemption) for early stage investors in startups.
Please list the implementing agencies
Australian Taxation Office
Please name the policy advisor(s) or leader(s) who have been key in introducing and/or designing this policy instrument
If you marked "start-up" and/or "scale-up" firms, please provide the specific definitions used
Defined as firms less than 3 years old, with limited net revenue (less than AUD 300,000 in the previous 12 months) and limited expenditure (less than AUD 1,000,000 in the previous 12 months). Must be an ‘innovation company’ under the Act.
Announced in December 2015, took effect on 1 July 2016.
Stated goal/metrics of the policy instrument
Increase the availability of angel investment capital to startups.
Evidence of results
Strong anecdotal support, but too early to say.
Challenges, criticisms and lessons
Restrictive definition of startup. Difficult period between announcement and measures taking effect: created a funding gap while investors held off until tax incentives kicked in.
Notes and additional context
Policy initially modelled on UK’s SEIS. Altered substantially for Australian context - particularly by restricting eligible companies to high-growth startups.