A leading investor has warned Labour that plans to change the way ‘carried interest’ payouts for private equity (PE) professionals are taxed should not be extended to venture capital.
In its manifesto, published today, the party pledged to close a loophole that sees proceeds from carried interest taxed as a capital gain rather than income, giving high earners a 28% rate of tax.
‘Private equity is the only industry where performance-related pay is treated as capital gains. Labour will close this loophole,’ the manifesto said.