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  • 22. Early stage venture capital limited partnership tax offset

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    You may be able to claim the early stage venture capital limited partnership (ESVCLP) tax offset if one or both of the following applies:

    • you are entitled to a tax offset in the current income year
    • you have an amount of unused ESVCLP tax offset carried forward from a previous income year.

    Any unused portion of the ESVCLP tax offset can be carried forward to future income years, subject to the tax offset carry forward rules in Division 65 of the ITAA 1997.

    L Current year tax offset

    Write at L the amount of ESVCLP tax offset referrable to the current income year.

    Include this amount in your total at D Non-refundable carry forward tax offsets in the Calculation statement.

    Your current income year ESVCLP tax offset is the sum of your tax offsets worked out based on your contributions to the ESVCLP:

    • as a limited partner of the ESVCLP, or
    • through a partnership or a trust.

    The ESVCLP must have become unconditionally registered on or after 7 December 2015.

    If you are a limited partner of an ESVCLP, your tax offset is limited to 10% of the lesser of the following:

    • your total contributions to the ESVCLP during the current income year (certain exclusions apply), and
    • your share (based on your interest in the entire capital of the ESVCLP at the end of the current income year) of the sum of eligible venture capital investments made by the ESVCLP during the period starting at the beginning of the current income year and ending two months after the end of the current income year.

    If you are a partner in a partnership or a beneficiary of a trust which has contributed to an ESVCLP, you may be entitled to an amount of ESVCLP tax offset. A written notification will be provided by the partnership to the trustee of the trust, setting out the fund’s entitlement to this tax offset. If a written notification has not been provided, contact the partnership or the trustee.

    For more information about the ESVCLP tax offset and the eligibility requirements, see ESVCLP tax incentives and concessions.

    P Tax offset carried forward from previous year

    Write at P the amount of ESVCLP tax offset carried forward from a previous year.

    If you claimed the ESVCLP tax offset in one or more earlier income years commencing on or after 1 July 2016, and did not apply all or part of the tax offset in those earlier income years, you may be able to carry forward and use those parts of the tax offset that was unapplied in this income year. To work out whether you can carry forward and use all or part of the ESVCLP tax offset from an earlier income year to this year, see Division 65 of the ITAA 1997.

    Do not include an amount at P if you are prevented from using the ESVCLP tax offset from an earlier income year by Division 65 of the ITAA 1997. For example, Division 65 states that before you can apply a tax offset from a prior year to reduce the amount of income tax that you will pay in a later year, you must apply it to reduce certain amounts of net exempt income. If the company is a base rate entity for the year, net exempt income is reduced by $1 for each 27.5 cents of the tax offset. Otherwise, net exempt income is reduced by $1 for each 30 cents of the tax offset.

    If you have not previously claimed this ESVCLP tax offset, or you did not have any unused ESVCLP tax offset from one or more earlier income years commencing on or after 1 July 2016, you do not need to complete P item 22.

    Include this amount in your total at D Non-refundable carry forward tax offsets in the Calculation statement.

    For more information, see ESVCLP tax incentives and concessions.

    Last modified: 03 Oct 2019QC 55199