# Close the carried interest loophole

> “Private equity is the only industry where performance-related pay is treated as capital gains. Labour will close this loophole.”
>
> — Labour Party; 2024 manifesto, page 21, 13 June 2024

- **Status:** Delivered
- **Status ladder:** Promised → In plan → Legislated → Funded → Delivering → Delivered
- **Policy area:** [Taxes](https://ledgergov.uk/promises/area/taxes)
- **Speaker:** [Labour Party](https://ledgergov.uk/actor/labour)
- **Made on:** 13 June 2024
- **Where:** 2024 manifesto, page 21
- **Cost a year:** Raises £72m to £88m a year (central £80m)
- **Who it affects:** Private equity and other fund managers who are paid carried interest
- **When:** From the 2026-27 tax year
- **Paid for by:** Not a spending pledge; Labour's costings count the £565m among the revenue paying for its manifesto plans (page 127)
- **Quote source:** https://labour.org.uk/wp-content/uploads/2024/06/Labour-Party-manifesto-2024.pdf#page=21 (checked word for word on 9 October 2026; Quoted for reporting; rights stay with the publisher)
- **Last updated:** 9 October 2026
- **Card:** https://ledgergov.uk/promise/uk-carried-interest-2024

## Where it stands

From the 2026-27 tax year, carried interest (the share of a fund's profits paid to its managers) is taxed under income tax instead of capital gains tax (Finance Act 2026, section 58). Under the design announced at Autumn Budget 2024, a 72.5% multiplier applies to qualifying carried interest brought into the charge (para 5.67). As an interim step, the capital gains tax rates on carried interest rose to 32% from 6 April 2025.

## Timeline

- 13 June 2024, Promised: Labour manifesto pledges to stop treating private equity performance pay as capital gains
- 30 October 2024, In plan: Autumn Budget 2024 says carried interest will be taxed within income tax from April 2026, and raises its capital gains tax rates to 32% from April 2025 ([evidence](https://assets.publishing.service.gov.uk/media/672b9695fbd69e1861921c63/Autumn_Budget_2024_Accessible.pdf))
- 18 March 2026, Legislated: Finance Act 2026 receives Royal Assent; section 58 moves carried interest into income tax ([evidence](https://www.legislation.gov.uk/ukpga/2026/11/section/58))
- 6 April 2026, Delivered: Carried interest is taxed under income tax from the 2026-27 tax year ([evidence](https://www.legislation.gov.uk/ukpga/2026/11/section/58))

## About the cost

Negative because the pledge raises money. Year used: 2028-29, the year Labour's costings use. The official Autumn Budget 2024 costing, covering both the 32% interim rate and the move into income tax, is £80m in 2028-29 (Table 5.1, line 21); central figure only. Other years: nothing in 2024-25 and 2025-26, a cost of £5m in 2026-27, £140m in 2027-28 and £85m in 2029-30. Labour's own costing was £565m in 2028-29 (manifesto page 127). Low–high is an editorial ±10% because the source gives a central figure only.

Costing sources:
- [HM Treasury: Autumn Budget 2024, Table 5.1, line 21](https://assets.publishing.service.gov.uk/media/672b9695fbd69e1861921c63/Autumn_Budget_2024_Accessible.pdf)
- [Labour Party: Change, 2024 manifesto (PDF), costings, page 127](https://labour.org.uk/wp-content/uploads/2024/06/Labour-Party-manifesto-2024.pdf#page=127)

## Sources

- [Labour Party: Change, 2024 manifesto (PDF), page 21](https://labour.org.uk/wp-content/uploads/2024/06/Labour-Party-manifesto-2024.pdf#page=21)
- [HM Treasury: Autumn Budget 2024 (30 Oct 2024), paras 2.57 and 5.67](https://assets.publishing.service.gov.uk/media/672b9695fbd69e1861921c63/Autumn_Budget_2024_Accessible.pdf)
- [Finance Act 2026, section 58: carried interest](https://www.legislation.gov.uk/ukpga/2026/11/section/58)

## Checks

- Checked by AI Journalist (automated) on 9 October 2026; human editor review to come.

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