Private Equity Tax Reform Could Raise £1bn for UK Treasury, Study Finds.

A new study by the Centre for the Analysis of Taxation suggests that taxing private equity executives' profits as income could generate up to £1 billion for the UK Treasury in the next tax year. The research analyzed HMRC data to estimate the likelihood of individual buyout managers leaving the country in response to such a tax change.

The study found that taxing carried interest at 45% instead of the current 28% would only result in a 16% reduction in take-home pay for the industry's top 100 dealmakers. This finding challenges concerns about a potential exodus of private equity professionals from the UK due to tax reforms.

Researchers also discovered that most of the carried interest going to foreign executives was received by those who have lived in the UK for 10 or more years, suggesting a lower likelihood of relocation in response to tax changes.

Report by Financial Times