On 30 August, the AIMA and the ACC submitted a response the HMT consultation on the tax treatment of carried interest.  Our response highlighted how private credit is one of the fastest growing global alternative investment strategies, and that private credit funds have become vital providers of finance and liquidity to SMEs and mid-market businesses.  When considering the tax treatment of carried interest, we emphasised that the UK Government should consider the following:

• An unfavourable taxation regime will weaken the UK as an asset management centre and its ability to obtain international investment for the broader UK economy.
• A tax regime which imposes requirements that do not recognise the realities of common fund structures is unlikely to succeed.
• Any changes should be implemented in a way consistent with existing tax legislation to avoid duplication, and in a manner which ensures consistent outcomes across different funds and strategies.

HMT has stated it will make a further announcement at the UK Budget on 30 October although information about the how the government intends to proceed may be made available sooner. For further information please contact Paul Hale ([email protected]) and Nicholas Smith ([email protected])