As the European hub of expertise and activity, the U.K. has long taken a thoughtful approach to structuring its regulations and tax laws to promote the private funds industry. That mindset has taken on greater importance in light of Brexit and the need for the U.K. to reassert itself as the place to form and administer funds in lieu of other jurisdictions that have risen to prominence, such as Luxembourg and Malta. The U.K. government’s 2021 decision not to increase capital gains tax rates – both on carried interest and in general – and its introduction of the new U.K. asset holding company regime were both steps in that direction. In this second article in a two-part series, the Private Equity Law Report interviewed Proskauer partner Stephen Pevsner on those 2021 U.K. tax initiatives and what PE sponsors can expect in 2022. In addition, the Private Equity Law Report spoke to Proskauer partner Amanda H. Nussbaum about relevant U.S. tax developments related to the pandemic (e.g.
, relocating offices to low-tax jurisdictions). In the first article
, Nussbaum provided insights on residual tax provisions from the failed Build Back Better Act that could resurface in 2022, as well as IRS audit efforts and the final regulations on carried interest. For more on E.U. and U.K. tax issues, see “Current Tax Challenges for Funds With European Investments
” (Sep. 29, 2020); and “Practical Tax Considerations Arising From Trends in European Fund Structuring
” (Feb. 11, 2020).