Increase tax on

Private Equity Fund managers'

Money from trading income

MONEY FROM BUYOUT FUNDS

• Tax at 47 per cent.
  Money received from buyout funds, known in the trade as their 'carried interest' .
• For such money gained by managers to be filed in their self-assessment tax return.

Background

Buyout funds:

• buy mature companies with borrowed money,
  use the company’s assets and income to pay off the debt,
  then sell them on.

Since 1987, HMRC (taxman) has taxed the money that managers receive from private equity funds as capital gains – at a rate of 28% – instead of as trading income, which is taxed at 47%. This has seen Government losing hundreds of millions of pounds a year – enough to pay the salaries of more than 10,000 nurses.

Since buyout funds make up around 70% of the private equity industry, this would net the Government a further £420m a year in tax.

UK Patriotic Millionaires think this is a good idea.

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