Majid Hussain featured in City AM

19 Feb 2025

A recent City AM article that covered the news that the Government has dropped its plan to increase taxes on private equity firms by reversing changes to the tax treatment of members at limited liability partnerships (LLPs), featured Partner and Head of Private Client, Majid Hussain.

In Majid’s full commentary, he noted: “HMRC’s decision to reverse its stance on the tax treatment of LLP members and withdraw its retrospective application is a necessary correction. The sudden change in guidance last year created significant uncertainty for private equity and professional services firms, undermining long-standing assurances from HMRC about capital contributions and partnership structures.

“While this reversal is a welcome step, the fact that firms were left in limbo, investing time and resources to defend their position, highlights broader concerns about the UK’s tax policy unpredictability. The government must ensure that tax rules remain stable, transparent, and internationally competitive, particularly in an environment where investment and talent are increasingly mobile.

“Beyond this issue, I still have serious concerns about the government’s plans to treat carried interest returns as trading income rather than investment returns, making them subject to income tax instead of capital gains tax. This fundamentally misunderstands the value that private equity adds to the UK through long-term investments in business restructuring and growth. If implemented, such a shift risks driving investment away from the UK at a time when attracting global capital is more crucial than ever.

“A well-calibrated and internationally competitive tax system is essential to maintaining the UK’s position as a leading global financial hub. The government must take urgent steps to restore confidence and ensure tax policy supports, rather than hinders, economic growth and investment.”

Read the full article on via the link below.

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