- The government ran an initial call for evidence on the tax treatment of carried interest between July and August 2024.
- At Budget 2024, it was announced that from April 2025 the minimum tax rate applicable to carried interest would increase to 32%. From April 2026, a new tax regime will be implemented to bring the taxation of carried interest within the income tax framework, subject to tax and NIC at approximately 34% where a minimum average holding period requirement was met or 47% in other cases. Certain elements of the new regime were subject to a consultation.
- In June 2025, HM Treasury published the outcome of this consultation and in July 2025 draft legislation for the new tax regime was released for technical consultation.
- Finance (No. 2) Bill 2024-26 was published in December 2025, including legislation introducing the new carried interest regime from April 2026.
- Timing: the new tax regime for carried interest will come into effect from 6 April 2026.
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