Travers Smith
11 Experts
15 Contributions by Travers Smith Experts
PRACTICE NOTES
FORTHCOMING CHANGE relating to the tax treatment of carried interest:
After a call for evidence on the taxation of carried interest conducted over summer 2024, the Autumn Budget 2024 formally confirmed plans to bring in a redesigned regime for carried interest from 6 April 2026, positioned within the income tax system and accompanied by tailored provisions to reflect the reward’s distinctive attributes. A consultation then explored possible new qualifying criteria for entry to the regime, and the government published its response in June 2025. Draft legislation setting out the new carried interest rules was released on 21 July 2025, intended for inclusion in Finance Bill 2026. The regime is to apply to carried interest arising on or after 6 April 2026. These measures were reaffirmed at the 26 November 2025 Budget, which also noted that revisions had been made to the draft
Tax
PRACTICE NOTES
Background
Enterprise Management Incentives (EMI) are share option arrangements favoured by employers and employees because of their flexibility and the generous tax reliefs they can deliver when administered correctly. These plans frequently permit participants to exercise on a sale, enabling them to dispose of their shares alongside the other shareholders. For businesses, they offer a chance to reward key staff for the effort that helps achieve what will often be a major milestone in the company’s history. For an introduction to the principal features of EMI schemes, their eligibility conditions and tax treatment, see Practice Note: How EMI schemes work and key features. Nevertheless, managing EMI options on a sale (whether advising the buyer or the seller) can be complicated, as a variety of matters may surface during the due diligence process, on either side of the transaction. To benefit from
Share Incentives
PRACTICE NOTES
The pension consequences of an internal group restructuring largely hinge on the make-up of the group’s pension provision. Material pensions questions commonly surface where the group underwrites one or more occupational defined benefit schemes. This Practice Note, using two case studies, highlights the principal matters that employers and trustees ought to consider when carrying out an intra-group reorganisation.
Key pensions considerations
If the group backs a defined benefit (DB) scheme, prompt thought should be given to whether the restructuring would:
trigger the liabilities for employer debt of a sponsoring employer under section 75 of the Pensions Act 1995 (the s 75 debt) and, if so, how that liability could be managed
negatively affect the sponsor support available to the scheme, which could in turn:
influence the trustees’ approach to the scheme’s
Pensions
PRACTICE NOTES
What is repo?
A repo, the market shorthand for a 'repurchase transaction', is an arrangement whereby one party (the seller) sells an asset to another (the buyer) with a simultaneous contractual undertaking that the seller will repurchase the asset from the buyer on a future date for a specified price agreed between both parties in advance.
Any asset capable of being transferred from one person to another may, in principle, be the subject of a repo transaction.
The assets most commonly used in repos are debt securities (bonds), equity securities (shares) and other financial assets, including loans and commodities.
However, commodity repos can raise distinctive documentary, structural and legal issues, which are not addressed in this Practice Note. For guidance on commodity repos, see Practice Note: Commodity repo transactions and true sale considerations...
Banking & Finance
PRACTICE NOTES
What is securities lending?
A securities lending arrangement typically sees the lender transferring a security outright to a borrower, while the borrower concurrently delivers collateral to the lender by way of an outright transfer. At the same moment, they agree that, on a future date, the borrower will return equivalent securities and the lender will return the collateral...
In 2018, the International Securities Lending Association (ISLA) issued documentation allowing parties to provide collateral under a security interest rather than via title transfer. This Practice Note focuses on transactions supported by title transfer collateral and, below, summarises the security interest approach together with the key differences from title transfer collateral...
Any asset capable of being transferred between parties can be used in a securities lending transaction. The assets most frequently involved are equity securities (shares) and debt securities (bonds), although comparable arrangements also exist for other
Banking & Finance
PRACTICE NOTES
FORTHCOMING CHANGE relating to the modernisation of stamp taxes on shares framework:
In 2027, stamp duty and SDRT will be replaced by a single, self‑assessed tax on securities—the securities transfer charge (STC)—which will be paid and filed through a new online portal. The design of the STC will largely align with the proposals consulted on in 2023. Finance Bill 2026 (FB 2026) confers a power, commencing on Royal Assent, to make secondary legislation enabling taxpayers to test the digital service by self‑assessing their stamp taxes on securities and submitting transactions electronically. For further information on the programme to modernise stamp taxes on securities, see News Analyses: Budget 2025—Tax analysis—Stamp and transfer taxes; Tax update spring 2025—Stamp taxes on shares modernisation; Tax update spring 2025—Tax analysis—Stamp and transfer taxes; TAMD 2023—Stamp taxes on shares modernisation; TAMD
Tax
PRACTICE NOTES
FORTHCOMING CHANGE relating to the tax treatment of carried interest:
After a call for evidence on the tax treatment of carried interest run over summer 2024, the Autumn Budget 2024 confirmed the government’s plan to introduce an updated carried interest tax regime from 6 April 2026, positioned within the income tax system with bespoke provisions to reflect the distinctive nature of this remuneration. A consultation then examined potential new eligibility conditions for entry to the regime, with the government’s response issued in June 2025. Draft legislation for the regime was released on 21 July 2025 for inclusion in Finance Bill 2026. The rules will apply to carried interest arising on or after 6 April 2026. These measures were affirmed at the 26 November 2025 Budget, which also noted amendments to the draft to incorporate stakeholder feedback. Pending commencement of the new
Tax
PRACTICE NOTES
FORTHCOMING CHANGE relating to the tax treatment of carried interest:
After a call for evidence on the taxation of carried interest that ran through summer 2024, the Autumn Budget 2024 set out plans to introduce a revamped carried interest regime from 6 April 2026. This will sit within the income tax system, with tailored rules to reflect the distinctive features of the reward. The intention is to recognise the particular nature of such rewards within taxation. A consultation then examined potential new qualifying criteria for access to the regime, and the government issued its response in June 2025. Draft legislation for the carried interest regime was published on 21 July 2025, intended for inclusion in Finance Bill 2026. The provisions will apply to carried interest arising on or after 6 April 2026. All of this was confirmed at the 26 November 2025 Budget, which also noted that
Tax
PRACTICE NOTES
FORTHCOMING CHANGE relating to the tax treatment of carried interest:
Following a call for evidence on the tax treatment of carried interest held over summer 2024, the Autumn Budget 2024 saw the government set out plans to introduce a revamped carried interest tax regime from 6 April 2026, operating within the income tax system and supported by tailored rules designed to reflect the distinctive features of the reward. A consultation then considered potential new qualifying criteria for entry into the new regime, with the government’s response being issued in June 2025. Draft legislation for the carried interest regime was published on 21 July 2025, for inclusion within Finance Bill 2026. The new provisions will apply to carried interest arising on or after 6 April 2026. All of this was confirmed at the Budget on 26 November 2025, where it was also noted that further
Tax
PRACTICE NOTES
The management of assets belonging to another person on a discretionary basis is a 'regulated activity' overseen by the Financial Conduct Authority (FCA).
As a general position, trustees of occupational pension schemes (Trustees) are not typically authorised by the FCA, or under applicable legislation, to manage most categories of scheme assets. Consequently, Trustees must pass day-to-day investment decisions to an FCA-authorised party to implement investments on their behalf. A frequent approach is to appoint an investment manager (the Manager), which constitutes a delegation of their core investment responsibilities. When a Manager is engaged under a discretionary investment management agreement (an IMA), the Trustees confer their discretionary investment powers. The scheme employer may also join the IMA to meet requirements connected to recovering VAT—see Practice Note: VAT and pension scheme costs. In contrast to investment advisory mandates or
Pensions
PRACTICE NOTES
FORTHCOMING CHANGE relating to the tax treatment of carried interest:
Following a call for evidence on the taxation of carried interest conducted over summer 2024, the government used Autumn Budget 2024 to set out a redesigned regime from 6 April 2026. This will be embedded within the income tax system, with tailored rules acknowledging the distinctive nature of the reward. A consultation then examined possible new qualifying conditions for entry to the regime, with the government’s response issued in June 2025. Draft legislation for the new carried interest regime was published on 21 July 2025 for inclusion in Finance Bill 2026. The provisions will apply to carried interest arising on or after 6 April 2026. This was all confirmed at the 26 November 2025 Budget, which also noted amendments to the draft to reflect stakeholder feedback. In the interim, ahead of
Tax
PRACTICE NOTES
FORTHCOMING CHANGE:
Following the 2020 call for evidence, the 2021 outcome, subsequent consideration by the relevant HMRC and industry working group, and a 2023 consultation, the government confirmed in its consultation outcome of 28 April 2025 that, from 2027, stamp duty and SDRT will be replaced by a single self-assessed stamp tax on securities, broadly reflecting the proposals in the 2023 consultation document. As further confirmed at Budget 2025 on 26 November 2025, this new single tax—called the Securities Transfer Charge—will be self-assessed and paid (and reported) through a new online portal.
For more information, see:
News Analyses: Tax update spring 2025—Stamp taxes on shares modernisation
Tax update spring 2025—Tax analysis—Stamp and transfer taxes
TAMD 2023—Stamp taxes on shares modernisation
TAMD 2023—consultation—stamp taxes on shares
Tax Administration and Maintenance Day—27 April 2023—Stamp and transfer taxes
Budget 2025—Tax
Share Incentives
PRACTICE NOTES
This Practice Note
This Practice Note sets out the function and fiscal treatment relevant to the general partner in a private equity fund organised as a UK limited partnership. It focuses, in particular, on the following:
the responsibilities performed by the general partner
the manner in which the general partner is remunerated
the fiscal treatment of fund expenses
the management charge
key points where the fund (and general partner) is constituted outside the UK, and
matters to address if the general partner is a limited liability partnership or a Scottish limited partnership (instead of a UK limited company)
For broader guidance on the overall structure of UK private equity funds generally, including the fund manager’s role and certain wider tax matters, refer to Practice Note: Tax and private equity funds—fund structure. Please note that this Practice Note does not cover the
Tax
PRACTICE NOTES
This Practice Note explains the UK tax position for investors in a standard UK private equity fund in relation to their share of the fund’s profits.
Summary of tax treatment
A key reason limited partnerships are the preferred vehicle for private equity funds is their tax transparency. English and Scottish limited partnerships are transparent for income tax, capital gains tax (CGT) and corporation tax. This look-through approach allows investors, as limited partners, to pool capital without creating an additional layer of tax.
Accordingly, income and capital gains (and, where relevant, losses) arising within the fund are treated as accruing to the partners as though they held the underlying investments themselves. This is significant because, as with any collective investment vehicle, the objective is for an investor’s post-tax return to mirror, as closely as possible, the after-tax outcome they would have achieved by investing directly in the
Tax
PRACTICE NOTES
This Practice Note explores VAT matters encountered in the private equity fund arena. It proceeds on the basis of a standard UK private equity fund arrangement, with the vehicle established as a limited partnership. (For a deeper look at how a typical UK private equity fund is put together, see Practice Note: Tax and private equity funds—fund structure.) This Practice Note reviews the VAT position for:
investing in a limited partnership fund
transferring interests in a limited partnership fund
the general partner’s priority profit share
whether VAT is payable on supplies of advisory and management services to a private equity fund
For broader VAT background, see Practice Note: VAT basic principles—overview.
Relevance of EU law
This Practice Note refers to EU Directives and Court of Justice of the European Union (CJEU) decisions. For guidance on the extent to which EU jurisprudence remains relevant for UK taxpayers after Brexit, see
Tax
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