Partnerships and capital gains tax structures
Discussion
So Trump has had a go at hedge fund tax structures. I think he's an odious individual, but probably mostly agree with him on this one. I thought this was a loophole HMRC had closed a while back, when the the PE guys took a kicking in the UK.
But I recently heard a rumour I heard that the partners in a Magic Circle law firm are have structured it such that they pay CGT on their yearly earnings (at 28%), and not income tax (which would be at 45%). This seems even further from legit CGT than the PE/Hedge fund carried interest structures.
a) Anyone know if this is true?
b) If they're managing to make it work, I can't think the partners of other professional services firms aren't doing similar
c) How does this work legally? And how is HMRC unable to close this particular loophole?
But I recently heard a rumour I heard that the partners in a Magic Circle law firm are have structured it such that they pay CGT on their yearly earnings (at 28%), and not income tax (which would be at 45%). This seems even further from legit CGT than the PE/Hedge fund carried interest structures.
a) Anyone know if this is true?
b) If they're managing to make it work, I can't think the partners of other professional services firms aren't doing similar
c) How does this work legally? And how is HMRC unable to close this particular loophole?
Agree, but this one seems to be incredibly blatant. I'm sure you're not suggesting that the discrepancies make the behaviour OK.
(Though my personal favourite dodge has to be the classification of pupillages as 'scholarships', making them tax free. Some of these pupillages pay £60k for the year...)
(Though my personal favourite dodge has to be the classification of pupillages as 'scholarships', making them tax free. Some of these pupillages pay £60k for the year...)
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