Income Tax Assessment Act 1997



Division 118 - Exemptions  

Subdivision 118-F - Venture capital investment  

Operative provisions

SECTION 118-428   Additional investment requirements for ESVCLPs  

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 pre-owned investments that the entity owns at that time;
does not exceed 20% of the partnership ' s *committed capital.

See subsection (3) for the value of investments.

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.

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.


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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