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Tax change prompts rethink on private equity funds

The UK government will ensure management fees are taxed at the higher income tax rate

Plans to crack down on tax workarounds by fund managers outlined by UK chancellor George Osborne in the Autumn Statement on Wednesday could force private equity firms to reassess their fund structures, according to lawyers and advisers.

The UK government will introduce legislation from April 6 next year that will ensure fund managers, including private equity firms pay income tax on fees for their services, including management fees, which it calls "disguised fee income".

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