Private Equity Managers Face 32% Tax on UK Carried Interest
- Tax on carry is to rise from current 28% rate, Reeves says
- Change was less steep than many industry participants feared
Rachel Reeves outside 11 Downing Street ahead of presenting her budget to parliament in London, on Oct. 30.
Photographer: Hollie Adams/BloombergPrivate equity managers buying and selling companies in the UK will have to pay 32% tax on their share of profits beginning in April, Chancellor of the Exchequer Rachel Reeves said, issuing a tax rise on the buyout industry that was less steep than some had feared.
The new tax rate on carried interest, up from a 28% that dealmakers currently pay on earnings from asset sales, was welcomed by the industry’s main lobbying group. It also compares favorably to the 45% top rate of income tax.