Rich Investors Turn to Start-ups Amid Tax Concerns
- Wealthy investors have increased their funding in start-ups significantly, with a 250% rise in SEISs from July 4 to September 16 compared to last year.
- This investment surge is primarily motivated by concerns over a potential rise in capital gains tax in the upcoming budget.
- The government is looking for ways to encourage more investment in British businesses to boost the economy.
In the wake of the general election on July 4, wealthy investors in the UK have significantly increased their investments in start-up companies. Between July 4 and September 16, investments in seed enterprise investment schemes (SEISs) surged by 250% compared to the same period the previous year. This trend is largely driven by concerns over a potential rise in capital gains tax (CGT) in the upcoming budget, prompting investors to act quickly to secure tax reliefs. The UK government is exploring ways to stimulate investment in domestic businesses to enhance economic growth, which aligns with the surge in funding for small firms. The increased investment not only reflects a strategic financial move by affluent individuals but also highlights the broader economic context in which the government is seeking to bolster the economy through encouraging private investment.