Travers Smith's Alternative Insights: Does the UK have a coherent strategy for private capital?

There had been much speculation in the run-up to this week's UK Budget that the government's anticipated tax increases would have a big impact on private capital.  That would have been a significant blow, after the changes announced last year to the taxation of carried interest and the taxation of so-called "non-doms".  However, it seems that the industry's voice – and that of the wider finance community – was heard. 

Wednesday's announcements did not include a wealth tax.  There was no exit tax on those leaving the UK.  There were no new taxes for partners – which would have been a major issue for the many private markets firms who use a UK LLP for their management vehicle.  There had also been a worry that a rise in income tax rates would automatically trigger another increase in the effective tax rate on carried interest (beyond the hikes announced last year).  In the event, none of those concerns were realised.  (Our 2025 UK Budget website is here, and our review of the measures of most interest to private capital firms is here.)