Alert on Section 37 foreign partnership interests from the BVCA Taxation Committee

The Tax Committee has also been in discussion with the Inland Revenue on the timing of tax deductions for interest on debt funding of investments by private equity funds where those funds include foreign limited partnerships (or equivalents) in their fund structure. Members and their advisers have been concerned that interest on loans from such partnerships might only be deductible when ultimately paid and not as it accrues, due to the wording of the relevant tax legislation. The Committee is pleased to report the Inland Revenue has now in general allayed those concerns. Full details will be published in due course by the Inland Revenue in their own Manuals