The Labour Party Manifesto for the election on 4 July 2024 has now been published. Our key tax takeaways from the manifesto for the asset management sector are as follows:
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Carried interest. Labour has pledged to “close the loophole” on carried interest, preventing performance-related remuneration received by investment managers from being taxed as capital gains. This has been costed to increase the tax take by £565 million in 2028/9. The basis of calculation is not clear, so it is not currently possible to tell whether they are proposing to impose tax at income tax rates (of up to 45%) on carried interest or at some intermediate rate between 28% (the current special capital gains tax rate for carried interest) and 45%. Labour previously indicated that they would consult on changes to the taxation of carried interest. It is clear that taxing carried interest as income in all cases would make the UK less attractive for investment managers particularly in the private equity, ventur