The federal budget has a bunch of changes aimed at helping startups

Image: Fishburners.

The government is making changes to laws to make it easier for startups to raise cash through crowdfunding and to lure top talent via employee shares schemes.

Under current rules, a startup would be covered in red tape trying to get to a position where it could use crowdfunding.

However, a new law will remove costly elements of transitioning to a public company and will make it easier to raise funds from a large number of small investors.

The new law will balance supporting investment, reducing compliance costs for small businesses and maintaining an appropriate level of investor protection.

Allocation options and shares to staff in startups is a cheap, but potentially lucrative, way to entice top talent.

However, current rules mean that staff getting shares and options have to pay tax when they receive them.

Under the new law the staff will not generally be liable to pay tax up-front on those shares or options.

From July, the default taxing point for options will be changed so that employees will not generally have to pay income tax until they can realise a benefit from their options.

Eligible startup companies will also be able to offer shares or options to their employees at a small discount and have tax deferred until sale.

The government is also abolishing the Fringe Benefits Tax on all portable electronic devices used for work, such as mobile phones, laptops and tablets.

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