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FT.com / In depth - UK tax reforms target private equity
UK tax reforms target private equity

Published: October 9 2007 21:23

The British government on Tuesday announced sweeping tax reforms designed to crack down on private equity in a move that provoked uproar from UK business leaders and tax experts.

Alistair Darling, chancellor, said by introducing a flat 18 per cent rate of capital gains tax for all investors, he would "make the system more straightforward and sustainable". It would "ensure that those working in private equity pay a fairer share", he said.

John Cridland, deputy director-general of the Confederation of British Industry, said the change would "adversely affect the balance between risk and reward, both for entrepreneurs and for the UK's vital private equity industry".

Many entrepreneurs selling their companies, employee shareholders, investors in companies listed on London's junior Aim market, and "angel investors" in unlisted firms, would see their tax bill increase from 10 per cent to 18 per cent.

The winners from the measures were expected to include buy-to-let homeowners and second-home owners.

Mr Darling also announced changes targeting non-domiciled tax payers living in the UK, but not paying tax on their overseas earnings.

Unions welcomed the changes, but complained they did not go far enough and the government should have stopped affording "privileges to this elite".



"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Wed Oct 10th, 2007 at 12:52:48 AM EST
[ Parent ]
Why 18%? This should be taxed the same as capital gains - 40% above a basic threshhold.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Wed Oct 10th, 2007 at 04:34:23 AM EST
[ Parent ]
We know who the Labour government labours for.

We have met the enemy, and it is us — Pogo
by Migeru (migeru at eurotrib dot com) on Wed Oct 10th, 2007 at 04:45:28 AM EST
[ Parent ]
And hikes of all kind are good. In the US, the democrats can't even get their behinds moving on a hike for private equity managers (see WaPo, through Yglesias)
by nanne (zwaerdenmaecker@gmail.com) on Wed Oct 10th, 2007 at 05:37:34 AM EST
[ Parent ]

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