Nithin Kamath Says Most Wealth Gets Captured Outside India, Offers Solution To Tackle It
Zerodha CEO said wealth creation can be captured by a large subset of Indians when Indian businesses do well.
Founder and CEO of Zerodha, Nithin Kamath on Monday emphasised on UK tax relief and capital gains exemption for startup investments. Kamath reiterated that it is a great way to incentivise the wealthy to invest in startup and urged for similar schemes to be implemented here so that the local wealth stuck in Gold, Real estate and fixed deposits in a better manner.
Nithin Kamath's Tweet
"UK offers 50% tax relief & capital gains exemption for startup investments. This seems a great way to incentivize wealthy to invest in startups We maybe need similar schemes to reduce our dependency on foreign VCs & better use our local wealth stuck in Gold, Real estate & FDs." [sic]
"The biggest problem to solve in India is to spread wealth inclusively & not just in the top 1%. This is possible only when wealth creation can be captured by a large subset of Indians when Indian businesses do well. Today, most wealth gets captured outside India." [sic]
"We have to nudge Indian retail investors to move some of their assets from FDs, gold, and real estate to back Indian entrepreneurs and maybe help the country grow inclusively. This is what excites us at Zerodha and even at Rainmatter."[sic]
Tax reliefs available while investing in UK startups
The UK government offers a 50% tax relief on investments made in schemes such as the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS). This means that for every £100 you invest, you will receive £50 in tax relief. The SEIS and EIS are both government-backed schemes which aim to encourage investment in small, businesses or businesses who are still in the early-stage. The tax relief is available to both individuals and companies, and it can be used to reduce your income tax bill or your capital gains tax bill.
In addition to the 50% tax relief, there are other benefits to investing in SEIS and EIS companies. The tax reliefs available through these schemes can be a significant incentive for investors, and they can help to reduce the risk of investing in startups.
However, there are some requirements for investing in startups through the SEIS and EIS schemes. Some of them are that the company must be a trading company and have fewer than 250 employees. The company must have raised less than £15 million in equity before the investment which must be made in new shares. The investment must be held for at least three years.
