Things you need to know
You may be able to claim the early stage investor tax offset, if one or both of the following apply:
- you're entitled to the early stage investor tax offset in 2024–25
- you have an amount of unused early stage investor tax offset you carry forward from a previous year.
If you don't have an early stage investor tax offset you carry forward or you're not entitled to claim this tax offset, go to question T9 Other refundable tax offsets 2025.
To qualify for this tax offset you (the investor) and the early stage innovation company need to satisfy the requirements.
For more information on the early stage investor tax offset and the requirements to qualify, see Qualifying for the tax incentives.
If you acquire your investment through a financing arrangement, to ensure you qualify for the offset, see Taxpayer Alert TA 2024/1 Early stage investor tax offset claimed using circular financing arrangements.
The maximum tax offset (including current year and amounts you carry forward from a prior income year) that you, and your affiliates combined, can claim in 2024–25 is $200,000.
If you're a partner in a partnership or a beneficiary of a trust that invests in an early stage innovation company during 2024–25, you may be entitled to an early stage investor tax offset. The partnership or the trustee of the trust must provide you with written notification of your entitlement to the early stage investor tax offset. If the partnership or the trustee don’t provide written notification, contact them.
This tax offset is non-refundable, however you can carry it forward if you don't fully utilise it in 2024–25. Any amount of unused tax offset that you're able to carry forward will show on your notice of assessment for the year ended 30 June 2025.
Work out the tax offset you carry forward from a previous year
Your notice of assessment or amended notice of assessment for the year ended 30 June 2024 should show if you have any unused early stage investor tax offset that you carry forward to 2024–25.
Do you have an amount of unused early stage investor tax offset on your notice of assessment or amended notice of assessment for the year ended 30 June 2024?
- No – Go to Working out your 2024–25 tax offset.
- Yes – Read on.
The unused early stage investor tax offset you carry forward from the previous year may need to be adjusted for any net exempt income. For an explanation of exempt income, see Amounts that you don't pay tax on 2025.
The unused early stage investor tax offset carried forward from a previous year is reduced by $0.30 for every dollar of unused net exempt income, if you have taxable income for that year. Unused net exempt income is any net exempt income left after deducting any tax losses of earlier income years from that year's net exempt income.
If you have unused net exempt income and are unsure how to calculate the early stage investor tax offset you carry forward from a previous year, contact us. Otherwise, read on.
The amount of your unused early stage investor tax offset will help you to complete Step 5 when working out your tax offset.
Working out your tax offset for 2024–25
Follow the steps to work out your tax offset for 2024–25.
Step 1
Work out the total amount you pay for eligible shares in all early stage innovation companies in 2024–25.
If you don't meet the requirements of the 'sophisticated investor' test for at least one of your 2024–25 investments in an early stage innovation company, your step 1 amount must not exceed $50,000.
If you're not a sophisticated investor and your step 1 amount exceeds $50,000 you can't claim this tax offset.
Step 2
Multiply the amount from step 1 by 20%.
Step 3
Identify your entitlements to any early stage investor tax offsets as a beneficiary of a trust or a partner in a partnership that invests in an early stage innovation company during 2024–25.
Step 4
Add together the amounts from step 2 and step 3.
Step 5
Subtract from $200,000 the amount (if any) of unused early stage investor tax offset you carry forward that you calculate in Work out the tax offset you carry forward from a previous year.
Step 6
If the step 4 amount is equal to or less than the amount you work out at step 5, then the step 4 amount is your tax offset for 2024–25.
If the step 4 amount is greater than the step 5 amount, then the step 5 amount is your tax offset for 2024–25.
Your tax offset 2024–25 amount may need to be further reduced if any of your affiliates are entitled to the early stage investor tax offset (whether for investments they make in 2024–25 or carry forward from 2023–24).
The maximum tax offset (including current year and amounts you carry forward from prior years) that you, and your affiliates combined, can claim in 2024–25 is $200,000.
Example: calculating your current year tax offset if you have an amount of tax offset you carry forward from the previous year
Alex carries forward early stage investor tax offset of $60,000 from 2023–24.
In 2024–25, Alex invests $500,000 in eligible shares in one early stage innovation company, and $250,000 in another. Alex meets the requirements of the sophisticated investor test for the investments. The tax payable on Alex's taxable income (before applying tax offsets) is $180,000. Alex has no other tax offsets and no exempt income.
The amount to record at question T8 – label O is $60,000. Alex calculates the amount to report at question T8 – label L as:
Step 1: The total amount Alex pays for eligible shares in early stage innovation companies in 2024–25 = $750,000 ($500,000 + $250,000).
Step 2: Multiply the step 1 amount ($750,000) by 20% = $150,000.
Step 3: Nil – Alex has no other early stage investor entitlements through trusts or partnerships.
Step 4: Alex adds the amounts from steps 2 and 3. The result is $150,000.
Step 5: Alex subtracts the amount at question T8 – label O ($60,000) from $200,000. The result is $140,000.
Step 6: As the step 4 amount ($150,000) is greater than the amount you work out in step 5 ($140,000), Alex writes $140,000 at question T8 – label L.
Alex can claim an early stage investor tax offset equal to the sum of the question T8 – labels L and O amounts ($60,000 + $140,000, totalling $200,000). Although the amount Alex carries forward tax offset from 2023–24 of $60,000 and the current year tax offset of $150,000 (step 4 amount) equal $210,000, Alex's total tax offset is capped at $200,000 for 2024–25. The unused excess of $10,000 can't be carried forward to 2025–26.
As Alex's entitlement to the tax offset ($200,000) is greater than the gross tax payable on taxable income ($180,000), the unused portion of the tax offset ($20,000) may be carried forward to future years.
End of exampleCompleting your supplementary tax return
Write the result from Step 6 at question T8 – label L. Don't show cents.
Write the amount of unused early stage investor tax offset to carry forward from the previous year, reduced by any net exempt income, at question T8 – label O. Don't show cents.
Where to go next
- Go to question T9 Other refundable tax offsets 2025.
- Return to main menu Individual supplementary tax return instructions 2025.
- Go back to question T7 Early stage venture capital limited partnership 2025.