Abstract
When comparing investment crowdfunding activity in the United States (“U.S.”) and other countries such as Australia, Canada, and the European Union, Professor Andrew Schwartz theorizes in his recent book Investment Crowdfunding that perhaps the fact that the United Kingdom (“U.K.”) has special tax benefits, though not specific to crowdfunding, is the reason for the discrepancy and why numbers in other countries are higher than when compared to the U.S. Having this claim in mind, Part I of this essay will delve into the U.K. tax treatment of investment crowdfunding. Part II will demonstrate that while not termed to apply specifically to crowdfunding investors (aside from the one case of the State of Virginia), the U.S. provides general investment incentives for investors in small business stock that, under specific requirements, may apply to investment crowdfunding as well. In Part III, the essay will reflect on the issues arising from the tax treatment of investment crowdfunding by deriving insights from the U.S. and the U.K. tax models. It will also offer suggestions to increase effectiveness and salience in the area.
Link to Full Article:
Tax Incentives for Investment Crowdfunding: A Comparative Analysis