Private equity heads have warned chancellor Alistair Darling that hitting the industry in the pre-Budget report will force them to invest less in the UK.
The 79 heads, surveyed by Grant Thornton, said that increasing the capital gains tax base which private equity players often benefit from would hit staff retention (49% of respondents) and make recruitment more difficult (50%).
Grant Thornton tax partner Stephen Quest said the industry could come out of the PBR relatively unscathed, reported the FT.
'While there may be some technical changes announced, which will have limited application, there should not be a substantive change to the general capital gains tax rules,' said Quest.
Other plans thought to have been considered by the chancellor targeting the PE industry included increasing the length of taper relief on CGT to five years from two, and reducing the tax deductibility of interest payments on shareholder loans.
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