- The government ran an initial call for evidence on the tax treatment of carried interest between July and August 2024.
- At Budget 2024, a new regime for carried interest taxation was announced to apply from April 2026. From April 2025 until April 2026, the tax rate applicable to carried interest would increase to 32%.
- Finance (No. 2) Bill 2024-26 was published in December 2025, including legislation introducing the new carried interest regime from April 2026.
- In March 2026, the Finance Bill received Royal Assent and became Finance Act 2026.
- Timing: the new tax regime for carried interest came into effect from 6 April 2026. This brings 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.
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