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Timmy Elsewhere

At The Business.

Taxing carried interest and hitting entrepreneurs.

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Mark Wadsworth
17 years ago

1. Knee jerk ‘anti-private-equity’ move.
2. To discourage buy-to-letters from selling to shore up property prices.
3. The change doesn’t actually deter people from setting up businesses, and it certainly does not affect ongoing businesses, it just discourages people from selling their businesses.
4. As you point out, super-profits get competed away. There is also something called ‘tax arbitrage’. Owners were happy to accept slightly lower prices for their businesses because they only pay 10% CGT. If this increases to 18%, then they will demand slightly higher prices, is all.

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