[Thread] Before I take a bit of a break from Twitter, Section 12J VC companies are trying to get people to invest before 30 June 2021.
I'm here to warn you about them:
I'm here to warn you about them:
1. Section 12J investments are 100% tax deductible in the year that you make the investment...
2. But what they don't tell you is that if you sell the investment within 5 years of making the investment, the whole deduction must be added back as an income.
This can mean that in the year that it's added back, you'll have to pay back a huge amount of tax.
This can mean that in the year that it's added back, you'll have to pay back a huge amount of tax.
3. This means that you're basically locked into the 12J investment, regardless of the fees they charge and regardless of how bad the investment performs.
4. The thing that irritates me the most, is that the companies selling the 12J investments only tell you about the 100% tax deduction, but often hide the fact of the 5 year claw-back rule.
5. As a risk averse tax consultant, I'm personally ecstatic that the door is finally closing on this investment product and I don't recommend it to anyone from a tax point of view.
This thread was brought to you by the Tax Maverick @Banker__X
This thread was brought to you by the Tax Maverick @Banker__X
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