Kevin Ashman and Suzanne Hill (Hogan Lovells) review the new ‘income based’ carried interest rules as set out in the Finance (No. 2) Bill and set out the key changes in the Bill from the draft legislation published last December.
There is a new hurdle for fund managers to jump in obtaining capital gains tax treatment for carried interest. Managers must ensure their funds meet the new average investment holding period test inserted by cl 37 of the Finance (No.2) Bill 2016 (as ITA 2007 Part 13 Chapter 5F). Otherwise carried interest arising on or after 6 April 2016 will be treated as ‘income based’ carried interest and automatically charged to income tax under the disguised investment management fees (DIMF) rules (ITA 2007 Part 13 Chapter 5E) introduced last year. The rules work differently for different fund types so managers will need to monitor which category...
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Kevin Ashman and Suzanne Hill (Hogan Lovells) review the new ‘income based’ carried interest rules as set out in the Finance (No. 2) Bill and set out the key changes in the Bill from the draft legislation published last December.
There is a new hurdle for fund managers to jump in obtaining capital gains tax treatment for carried interest. Managers must ensure their funds meet the new average investment holding period test inserted by cl 37 of the Finance (No.2) Bill 2016 (as ITA 2007 Part 13 Chapter 5F). Otherwise carried interest arising on or after 6 April 2016 will be treated as ‘income based’ carried interest and automatically charged to income tax under the disguised investment management fees (DIMF) rules (ITA 2007 Part 13 Chapter 5E) introduced last year. The rules work differently for different fund types so managers will need to monitor which category...
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