Kitty Swanson and Kirsten Hunt (Mayer Brown) consider some key issues regarding incentivising fund managers in the context of the ongoing debate surrounding carried interest.
One of the key challenges facing investors is how to incentivise those responsible for managing their investments and ensure that their interests are aligned with those of the investors. This challenge endures in large part due to the significant difference in the UK tax rates for income (subject to income tax at rates of up to 45% plus for employment-related income NICs) and for capital (subject to capital gains tax at a maximum rate of 20% or 28% for carried interest or residential property). No-one wants to pay 47% tax if they can pay 20% or 28% so it is important to individual managers that they receive returns in the form of capital where possible.
Carried interest
For the last few...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
Kitty Swanson and Kirsten Hunt (Mayer Brown) consider some key issues regarding incentivising fund managers in the context of the ongoing debate surrounding carried interest.
One of the key challenges facing investors is how to incentivise those responsible for managing their investments and ensure that their interests are aligned with those of the investors. This challenge endures in large part due to the significant difference in the UK tax rates for income (subject to income tax at rates of up to 45% plus for employment-related income NICs) and for capital (subject to capital gains tax at a maximum rate of 20% or 28% for carried interest or residential property). No-one wants to pay 47% tax if they can pay 20% or 28% so it is important to individual managers that they receive returns in the form of capital where possible.
Carried interest
For the last few...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
