Ann released on 23 of October: SOR Pooled Development Fund Tax...

Ann released on 23 of October:
SOR Pooled Development Fund Tax Benefits
Perth, Australia, 23October 2020 – Strategic Elements Ltd (ASX:SOR) has received a number of enquiries
from current shareholders and potential investors on the tax benefits of the Pooled Development Fund
program. Some enquiries relate to whether the shareholder receives the capital gains tax free benefit
on selling listed shares in SOR or whether the Company has this benefit on its investments. The Company
confirms that it is the shareholder who potentially pays no capital gains tax on the profit made from
selling their listed SOR shares. The Company provides the following information for clarification below.
Pooled Development Fund Overview
The aim of the Pooled Development Fund (PDF) program is to increase the supply of capital to Australian
small and medium-size enterprises (SMEs). PDFs are venture capital funds registered under the Pooled
Development Funds Act1.
PDFs and their shareholders receive tax benefits on the income derived from their equity investments.
This is to help compensate for the higher risk of investing in SMEs. Shareholders are exempt from tax
on the income and gains derived from holding and disposing of PDF shares2
. Shareholders should seek
professional tax advice.
PDFs will be taxed at 15% on the income and gains derived from equity investments in Australian SMEs.
The extent of the above tax benefits depends upon a number of factors.
The investee company must have issued shares to raise capital to:
• establish a new business activity
• substantially expand production capacity or services
• expand or develop markets
A PDF can't invest in companies whose primary activities are either:
• retail operations retail
• property development