INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS  

Division 118 - Exemptions  

Subdivision 118-F - Venture capital investment  

Operative provisions

SECTION 118-428   Additional investment requirements for ESVCLPs  

118-428(1)  
The additional investment requirements for ESVCLPs , for an investment in a company or in a unit trust, are:


(a) if the entity making the investment does not, when the investment is made, own any other investment in the company or unit trust:


(i) *shares in the company; or

(ii) units in the unit trust;
are not, when the investment is made, listed for quotation in the official list of a stock exchange in Australia or a foreign country; and


(b) if the investment is *pre-owned when the investment is made:


(i) the entity already owns investments in the company or unit trust; or

(ii) the entity will, in connection with making the investment, make other investments in the company or unit trust, some or all of which are not pre-owned; and


(c) if the investment is pre-owned when the investment is made - the sum of:


(i) the value of the investment when the entity makes it; and

(ii) the total value of all the other investments that the entity owns at that time;
does not exceed 20% of the partnership ' s *committed capital.
Note:

See subsection (3) for the value of investments.

118-428(2)  
An investment is pre-owned if it was issued or allotted to an entity other than the entity that owns the investment. However, the investment is not pre-owned if it:


(a) was issued:


(i) to an underwriter or sub-underwriter of the issue of the investment; or

(ii) to a person for the purpose of being offered for sale; and


(b) was still held by the underwriter, sub-underwriter or person immediately before being acquired by the entity that now owns the investment.

118-428(3)  
The value of an investment of an entity at a particular time for the purposes of this section is the value of the investment as shown in:


(a) the last audited accounts prepared for the entity for the purposes of the Corporations Act 2001 that relates to a period ending less than 18 months before that time; or


(b) a statement, prepared in accordance with the *accounting standards and audited by the entity ' s auditor, showing that value as at a time no longer than 12 months before that time.

118-428(4)  


However, for the purposes of this section, the value of the investment at that time is the value provided for by section 118-450 if:


(a) there are no such audited accounts; and


(b) the entity does not have an auditor at that time.


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