Changes to the tax treatment of carried interest (to the detriment of fund managers) are becoming a regular feature of Finance Acts. Yesterday’s draft Finance Bill clauses will continue the trend by implementing last July’s proposals to tax some carried interest and other performance incentives as trading income where the fund does not hold its … Continue reading HMRC v. Carried Interest: Round 3
Gains arising on or after today via carried interest are subject to new computational rules. Essentially, an affected individual will be taxed by reference to the full amount received less any sums actually invested by that individual. Whilst a capital gains treatment is preserved, it is intended that gains will be calculated in line with … Continue reading Carried interest – raising the effective rate of capital gains tax
The first all-Tory Budget of this most political of Chancellors will have to balance his stated commitment to cut government spending by £30bn over the next two years with his self-denying ordinance prohibiting increases in NICS, VAT or income tax in this Parliament. He will want to get the economic pain over with as soon … Continue reading July Budget: what we’re expecting
As announced in the Autumn Statement, ER no longer applies in respect of disposals of goodwill to a ‘related’ company on or after 3 December 2014. However, the draft legislation revealed that the changes will have a wider impact than originally anticipated. Today’s Budget announces a change to the draft legislation to deal with one … Continue reading Entrepreneurs’ relief in relation to transfers of goodwill
The announcements today by the Chancellor included surprises, confirmed many predictions but some topics were notably absent. Income tax rates – no major review Recent debates on income tax rates have been highly political and will continue to be so as we approach the election. The Chancellor has increased the personal allowance by £500 for … Continue reading Wish you were here: what was missing from Budget 2014?
Despite the gathering pace of the UK economic recovery, the Chancellor has warned that there is a “long way to go” and that 2014 will be “a year of hard truths”. With the 2015 general election looming, the Budget is likely to be more political than normal. The Chancellor has said that he will focus … Continue reading Getting ready for the Budget 2014
After one of the more heated consultations in recent years, HM Revenue & Customs has now published revised guidance on the intended operation of the new “salaried members” rules, which counteract what the Government regards as “disguised employment” through the use of LLPs. The revised guidance addresses some of the concerns raised, highlights HMRC’s highly … Continue reading “Salaried Members” of LLPs: re-categorisation of junior partners
A few interesting tax changes announced today across the funds spectrum: UK authorised funds The 0.5% stamp duty reserve charge on dealings in units in UK unit trusts and OEICs will be abolished from 1st April 2014, a very welcome change. The Government will consult on a proposal to remove the requirement to withhold tax … Continue reading Investment funds – changes in the Budget
The use of service partnerships has become increasingly common, particularly where the variable pay component is high. Such arrangements typically give rise to NICs advantages, also they side-step certain difficulties that might otherwise be encountered in the context of income tax as it applies to employees. The press release refers to the “disguising of employment relationships”. Hopefully, this … Continue reading Partnerships and LLPs – further thoughts
Partnerships and LLPs are well established structures for investment funds and business services, popular due to their flexibility and tax transparency. However, the Government is concerned that this flexibility has been abused for tax avoidance purposes and has announced that it will consult on measures to: remove the presumption of self-employment for LLP partners to … Continue reading Partnerships and LLPs – trouble ahead?