Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Investors definition

What does Investors mean? In private equity practice, investors are the persons or entities that commit capital to a fund in return for economic returns and contractual rights under the fund documents. In the UK and Ireland, private equity funds are commonly structured as English or Scottish limited partnerships or the Irish ILP; investors typically participate as limited partners (LPs). Investors are mainly institutional: occupational pension schemes, insurance companies, sovereign wealth funds, funds of funds, and university or charitable endowments. High‑net‑worth individuals and family offices also invest, often via feeder, nominee or aggregator vehicles. Some may make co‑investments alongside the fund. The term...

UK taxation of private equity limited partnership investors: dividends, interest and chargeable gains, non-UK source issues, partnership filing and key anti-avoidance regimes

Published by a LexisNexis Tax expert

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 underlying assets.

For further detail on the general tax position of limited partnerships, see Practice Note: Taxation of limited partnerships. The tax treatment of an individual investor will, therefore, depend on the nature of...

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Emily Clark

Travers Smith

Emily trained at Travers Smith and is a partner in the tax group. She specialises in the taxation of investment funds acting for private equity houses, hedge funds and real estate funds.She advises on fund formation and on tax-efficient structures for fund managers, carried interest and LLP conversions. She has particular expertise in tax structuring for non-domiciled investors and fund managers.Emily also has extensive experience of group restructuring, international tax, joint ventures and real Emily is a member of the British Property Federation´s tax committee....

Web page updated on 22/05/2026

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