Accountancy Age Quotes Serena Lee on Plan for Tax Hike on Carried Interest
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Akin tax partner Serena Lee was quoted in Accountancy Age in an article that considers U.K. Labour Party plans to raise the tax rates applicable to carried interest.
Accountancy Age notes that the plans, announced by Labour in September 2021, would seek to tax carried interest as ordinary income at 45% instead of capital gains at 28%.
Serena believes a tax hike on carried interest would create a “uniquely unfavourable regime for private equity executives” and “substantially weaken the U.K.’s competitiveness in this area”.
She points out that the U.K.’s regime is “in many respects less favourable” than some other countries—the U.S., for instance, taxes carried interest at 20%—and “the asset management industry brings substantial economic benefits to the U.K. beyond revenue from personal taxes: it creates jobs, supports professional services, and encourages investment into local businesses.”
Serena concluded by noting “Asset management professionals are often internationally mobile. Many other jurisdictions would be more than happy to snap up these individuals.”
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