Private equity executives have received a tax break worth as much as £4 billion under the “carried interest” rules that Labour plans to abolish if it wins the general election, data obtained by The Times has revealed.
The figures demonstrate that a lenient tax treatment of private equity executives’ profits has helped some of the wealthiest workers in Britain to reduce their tax bills.
The rules have been characterised as a “loophole” by Dan Neidle, a leading tax expert and the founder of the Tax Policy Associates think tank.
Executives of a private equity fund invest in the vehicle with investors, receiving what is known as “carry” or “carried interest” on profits, which is taxed at 28 per cent, the rate of capital gains tax,