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New Fintech Tax Incentives for Retirees



An investment direction retirees are heading for is Fintech. But what on earth is it and why are over 65’s interested?

In the last Census, there were almost 2.7 million Australians aged over 65, making up around 13 percent of the population. Many have worked hard for decades, looking forward to a life less stressed and more financially free. Now more than ever over 65s are looking to invest and seek tax savings to maximize their hard-earned dollars.


An emerging financial services sector, Fintech refers to Financial Technology, and it has the potential to give the big banks a run for their money. Why? Because entrepreneurs are going to the public for venture capital instead of the big banks. It is risky, exciting and has been enjoying success with our European neighbors, the United States and has now arrived in Australia.


Crowdsourcing for ideas through venture capital has entrepreneurs taking their master plan pitches to newly licensed regulated platform Birchal. Birchal then presents the information to potential investors. They, in turn, may choose to buy shares in the company. This peer to peer investment innovation changes how lending takes place. The big banks and financial institutions are no longer the first port of call. These Early Stage Investment Companies or ESIC would historically seek out Silicon Valley, the womb of tech advancement, to talk turkey with a high rolling investor. Now they are looking to platforms like Birchal to qualify for representation.


Real Estate disruptor Next Address is one such example. Founder Julie O’Donohue saw the success of Airbnb and Uber and pondered on how transparency and communication could be implemented in the same way in the real estate industry and bring efficiency and reduce costs for buyers and sellers.  The result? A tech-savvy buyer-selling matching platform that can save consumers thousands. Now some of that pie is being offered to every day Aussies. https://nextaddress.com.au


Why is it popular? The tax advantage has positive potential with the ATO handing out attractive tax incentives for investors.


Currently, if you invest in an early qualifying stage innovation company (ESIC), you may be eligible for these tax incentives. The tax incentives provide qualified investors who purchase new shares in an ESIC with a non-refundable carry forward tax offset equal to 20% of the amount paid for their qualifying investments. Capital gains incentives are also abundant for the right qualifiers. https://www.ato.gov.au


Crowd-sourced funding puts you in close contact with your investment. However, issuers using this facility include new or rapidly growing ventures and investment in these types of enterprises is speculative and carries high risks. You should be in a position to bear this risk without undue hardship.


The future is looking bright for over 65s looking for innovative investments. Right now the Australian Government is tying the final strings on taking Social Impact Investing Aggregation to another level with tax incentives being called for. Many mature Australians want to see positive change and get a good return on their investment with some generous tax savings. It also has a certain socially responsible edge to it, and it could very well lift some of the burdens from the Government coffers. Social Impact Investing brings together financial support and expertise from the public, private and not-for-profit sectors to achieve a social objective. Housing, programs, small business training for disadvantaged persons, etc. are examples of social impact investing.


Fintech is a shiny attractor for impact investors, as we watch the emergence of these two examples of disruptive potential!