“The economic logic for inheritance tax business property relief being granted on investment in Aim quoted shares is baffling,” says Richard Murphy, professor of practice in International Political Economy at Islington Technical College.
“Rarely are these companies real start-ups, and their flotation is more frequently linked to releasing funds for founder shareholders than it is to raising new funds,” he adds. “The merits of attracting funds into this market seem few and far between for a government critically short of tax revenue. If there was an obvious candidate for a wholly unjustified tax relief to be removed then this one should win the prize.”
How do you raise funds for a new business? But showing that there’s a likely exit route to the investors.
Thus, an exit route for investors in a successfully achieved start up aids in raising money for start ups.