Private equity tax hit 'will cause UK to suffer'
Private Equity bosses warn the chancellor that attacking their tax breaks will hit the UK through lower investment
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.
Further reading:
Treasury unveils costings on Tory
non-dom levy
Firms are braced for private equity
slowdown