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The government has published a call for evidence on the tax treatment of carried interest. Carried interest is a form of performance-related reward received by fund managers, primarily in the private equity industry. The government believes that the current tax regime - under which such interest can be taxed at capital gains tax rates - does not properly reflect its economic characteristics, nor the level of risk assumed by fund managers in respect of it.
The government plans to engage with all interested parties and is particularly interested in feedback on these questions:
- How can the tax treatment of carried interest most appropriately reflect its economic characteristics?
- What are the different structures and market practices with respect to carried interest?
- Are there lessons that can be learned from approaches taken in other countries?
Submissions should be emailed to carriedinterest@hmtreasury.gov.uk by 30 August 2024.
