Statement on the review of Capital Gains Tax

The Office for Tax Simplification (OTS) is conducting a wide-ranging review of Capital Gains Tax (CGT). The Chancellor indicated in evidence to the Treasury Select Committee that this is part of a regular review of different aspects of the UK tax system. We are in the process of responding to this consultation.

The current regimes for fund managers’ carried interest in the funds they advise and management teams’ equity participation in portfolio companies are very important for the private equity and venture capital industry.

The BVCA believes that, so far as carried interest and management equity are concerned, the boundary between income and capital is conceptually drawn in the right place and its integrity is fully protected by existing rules.

It is also important that any tax changes do not undermine the government’s clearly stated policy of developing the UK as an attractive location for the asset management industry.