Labour Says It’s ‘Determined’ to End Private Equity Tax Loophole

(Bloomberg) -- The UK’s Labour Party confirmed plans to raise taxes on private equity fund managers.

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In its election manifesto, published Thursday, Labour pledged to change the taxation rules, which the party said would raise £565 million ($722 million) annually if it wins the general election on July 4, to be spent on adding mental-health staff in the National Health Service, legal aid for disaster victims and the waiving of visa costs for non-UK veterans who served in the British military.

Labour is planning to alter the way carried interest — a portion of investment returns, shared between fund managers — is treated. Currently, recipients pay a capital-gains tax at a 28% rate. Labour may change the regime so carried interest is treated as income, which for many would be taxed at 45%.

Speaking at the manifesto launch in Manchester, Labour leader Keir Starmer played down speculation he would moderate the plan.

“We’re absolutely determined to change the rules and close this loophole,” he said.

Labour plans to give full details should it form the next government.

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