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LONDON DAILY ARCHIVE

UK to Reform Carried Interest Taxation

Government targets private equity compensation in tax overhaul

31 July 2025 · 23:30 UTC

The UK government is preparing to introduce fundamental changes to the taxation of carried interest, a form of performance-based compensation widely used in private equity.

The proposed reform aims to close perceived loopholes and align tax treatment with income earned from traditional employment.

Industry leaders have voiced concern over the potential impact on investment competitiveness, while officials insist the move is part of a broader effort to modernize the tax code.