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
‘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
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Changes to the tax system is urged to support the growth of entrepreneurs, found a report from the Grant Thornton UK, the Institute of Directors, and the Prelude Group