TLDR:
- Labour plans to close the ‘carried interest’ tax loophole for private equity professionals.
- Investor Tim Levene warns against extending this to venture capital.
An investor, Tim Levene, from Augmentum Fintech, has cautioned Labour against applying the proposed changes to the taxation of ‘carried interest’ in private equity to venture capital as well. Labour’s manifesto includes plans to close the tax loophole that allows proceeds from carried interest to be taxed as capital gains with a 28% rate, which is lower than income tax rates. Levene highlights the unique nature of performance-related pay in private equity and suggests that venture capital should not be penalized in the same way as private equity.
This move by Labour to address the discrepancy in tax treatment of carried interest in different investment sectors has drawn attention from investors and industry professionals. Levene’s concerns about potential ramifications on venture capital highlight the complexity and implications of tax policy changes on investment practices.
