TaxCorporate TaxPrivate equity bosses enjoy extra tax break

Private equity bosses enjoy extra tax break

Revenue rule from 1987 allows buy-out firms to reduce tax on carried interest

Private equity executives who only have to pay 10% tax on carried interest
they receive can reduce the tax they pay even further by taking advantage of a
20-year-old HMRC memorandum.

According to the FT the 1987 rule allows buy-out executives to
offset 20% of the initial price of the assets they buy against the already low
tax rate they pay on carried interest.

The inner workings of private equity have been exposed following intense
scrutiny from unions and politicians, who have criticised
the private equity firms of destroying jobs, avoiding tax and opaque governance.

Leading private equity heads from Blackstone, 3i, Carlyle Group and KKR are
all to answer questions on these issues at a Treasury select committee meeting
this afternoon.

According to City A.M., select committee member Angela Eagle said
more firms were to be called before the committee in the future.

Further reading:

Terra Firma CEO leaps to private equity defence

Steps the Treasury could take to tax buyout bosses at a
higher rate

Related Articles

Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

Corporate Tax Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

2m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2m Emma Rawson, ATT Technical Officer
EU divided over radical tax reforms targeting tech giants

Corporate Tax EU divided over radical tax reforms targeting tech giants

2m Alia Shoaib, Reporter
‘Improve rather than lose’ disincorporation relief, tax body urges

Administration ‘Improve rather than lose’ disincorporation relief, tax body urges

3m Austin Clark, Reporter
How to educate your clients about tax avoidance

Corporate Tax How to educate your clients about tax avoidance

3m Clear Books | Sponsored
CGT clampdown nets HMRC £124m – but could lead to increase in use of avoidance schemes

Corporate Tax CGT clampdown nets HMRC £124m – but could lead to increase in use of avoidance schemes

3m Austin Clark, Reporter
‘Google tax’ nets HMRC £281m

Corporate Tax ‘Google tax’ nets HMRC £281m

3m Emma Smith, Managing Editor
Should I incorporate my buy-to-let business?

Corporate Tax Should I incorporate my buy-to-let business?

4m Emma Rawson