UK govt launches consultation on taxing carry
30.07.2024 – Articles
Chancellor of the Exchequer Rachel Reeves yesterday announced the date for the Budget – 30th October. With that announcement, a consultation on the taxation of carried interest has been launched.
Changing the way in which carried interest is taxed was one of Labour’s proposed policies in the run up to the UK general election. Following Labour’s success in the polls, the party’s manifesto pledged to “close the loophole” on carried interest, seeking to prevent performance-related pay from being treated as capital gains.
The government’s call for evidence outlines the ‘case for approach and reform’:
While the tax treatment of carried interest is the subject of considerable debate, the government believes that the current tax regime does not appropriately reflect the economic characteristics of carried interest and the level of risk assumed by fund managers in receipt of it.