The UK government has rejected a proposed change in capital gains tax rates that would have taken a bigger chunk of private equity profits.

The decision was a response to a review of the capital gains tax system—commissioned by the UK’s finance ministry in July 2020—that recommended the government closely align the capital gains tax with income tax, among other things.

“This is a real boon for the private equity industry,” said Kevin Cummings, the UK head of corporate tax at law firm McDermott Will & Emery, praising the government’s decision. “There’s been widespread paranoia that carried interest would lose its preferential treatment and be taxed instead as ordinary pay at rates of up to 47%.”

Read more/Source: Pitchbook