Thread by @RachelReevesMP

NEW: Labour will scrap the private equity carried interest loophole – a loophole that leaves fund managers with a tax break of up to £170,000 a year.

Here’s why [THREAD] 
ft.com/content/16c17b…

How does this deeply unfair loophole work at the moment? 

Firstly, the same rules have applied since 1987, despite huge economic changes. 

Since then, the income fund managers receive in carried interest has been taxed at the rate of Capital Gains Tax, rather than Income Tax.

That means an additional rate taxpayer (someone earning over £150,000) is paying 28% on carried interest - rather than 45% if it was treated as regular income.

With 2,000 people receiving carried interest income per year, that’s an average gain of £1 million per person, or a tax break of up to £170,000 for an additional rate taxpayer. 

That makes the carried interest loophole deeply unfair.

By closing this loophole, Labour would reduce some of the tax incentives that have led to asset stripping.

And we’ll raise £440 million a year in tax.

mirror.co.uk/news/politics/…

New data has shown us how nearly 60% of major retailers entering administration in the last decade were linked to private equity.

That includes names many of us know and remember well: BHS, HMV, Debenhams, Toys’ R’ Us and Woolworths.

The Conservatives could end this loophole now to stop this huge tax break and to protect businesses better from asset stripping.

That’s why Labour is calling on them to put this change into their upcoming budget.

It’s not right that ordinary businesses working people are hit by a jobs tax, but private equity fund managers won’t pay a penny more tax on their large bonuses.

Labour will end the unfairness in the tax system, protect businesses and boost our economy.
theguardian.com/politics/2021/…