It has been almost two decades since Nicholas Ferguson, a grand figure in the private equity business, caused a storm by talking out loud about his industry’s dirty little secret. It could not be right, he said, that highly remunerated private equity executives could pay less tax than a cleaner or other low-paid workers.
Things have moved on a bit since 2007. So-called “carried interest”, or carry – the portion of an investment profit that the private equity managers retain as a bonus for success – is now taxed at 28% under the capital gains regime; in the old days, rates in effect as low as 10% could be secured thanks to various exceptions.
