The general anti-avoidance provisions in Part IVA of the Income Tax Assessment Act 1936 may apply to schemes to access the early stage investor tax incentives, including both the tax offset and the modified CGT treatment.
These rules apply to prevent taxpayers from obtaining tax benefits by entering into contrived or artificial arrangements to access the tax incentives. Where the conditions in Part IVA are satisfied, the Commissioner can cancel the relevant tax benefits.
Investors who buy new shares in a qualifying early stage innovation company (ESIC) may be eligible for tax incentives.