Nicholas Ferguson's statements from 2007 still resonate as they highlight the inequity of private equity executives paying lower taxes than less affluent workers, raising questions about tax fairness.
The Labour party's manifesto made a bold claim to close the unique capital gains loophole for private equity, projecting an additional income of 565m for the Treasury.
The recent budget proposal to only increase capital gains tax on carried interest to 32% from 2025, while maintaining specific regulations, represents a significant concession to private equity interests.
With adjustments and specific rules expected to put taxation on carried interest at about 34%, the anticipated raise in revenue will be significantly lower than the originally promised 565m.
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