Private equity funds

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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:

  1. •

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

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Latest Tax News

Tax weekly highlights—25 September 2025

This week's edition of Tax weekly highlights includes: (1) new HMRC guidance for labour supply chains involving umbrella companies, (2) updated NICs guidance on internationally mobile employees, (3) a technical note on Reserved Investor Funds, and (4) News Analyses on the UT’s decisions in Pawar and Circleplane.

UT strikes out taxpayer’s appeal concerning recusal of the FTT judge (Circleplane Ltd v HMRC)

Tax analysis: In Circleplane Ltd v HMRC, the Upper Tribunal (UT) struck out an appeal against a decision of a judge of the First-tier Tax Tribunal (FTT) not to recuse herself from hearing the appellant’s appeal. It also rejected an application for its decision to be anonymised.

FTT rules that not receiving a letter can constitute a reasonable excuse (MBP Europe Ltd v HMRC)

Tax analysis: In MBP Europe Ltd v HMRC, the First-tier Tax Tribunal (FTT) allowed the appellant’s appeal against a penalty, imposed by HMRC under Schedule 26 of the Finance Act 2021 (FA 2021), for the late payment of VAT. This was on the basis that the appellant demonstrated that it had not received a letter informing it that it was being moved to the payments on account regime.

UT follows Medpro when applying Martland three-stage test, but still refuses late appeal application (Tajinder Pawar v HMRC)

Tax analysis: In Tajinder Pawar v HMRC, the Upper Tribunal (UT) set aside the First-tier Tax Tribunal’s (FTT) decision refusing permission for a late appeal against a Personal Liability Notice (PLN), as it found that the FTT had erred in its weighting of the need to respect time limits when applying the third-stage balancing exercise test set out in Martland. On remaking the decision, it dismissed the taxpayer’s appeal.

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