Private equity funds

FORTHCOMING CHANGE relating to the tax treatment of carried interest: Following a call for evidence on the tax treatment of carried interest that ran over summer 2024, at Autumn Budget 2024 the government announced that it would introduce a revised tax regime for carried interest from 6 April 2026 that would sit within the income tax framework, subject to special rules to take account of the unique characteristics of the reward. A consultation on potential new qualifying conditions for access into the new regime followed, with a government response to this being issued in June 2025. Draft legislation for the new tax regime for carried interest was published on 21 July 2025, for inclusion in Finance Bill 2026. The new rules will have effect for carried interest arising on or after 6 April 2026. In the meantime, the capital gains tax rates applicable to carried interest were increased to 32% with effect from 6 April 2025. For more on this carried interest tax reform, including some commentary from legal experts in the field, see:

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Analysis—Carried interest: the L-day changes (2025): Tax Journal, Issue 1718, 20

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