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ARTICLE · 21 MARCH 2023

Tax Relief For US PE Managers Residing In UK

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On March 15, Chancellor Jeremy Hunt introduced the UK's Spring Finance Bill 2023 (hereinafter the "Budget").

GlobalTax
Withers LLP
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On March 15, Chancellor Jeremy Hunt introduced the UK's Spring Finance Bill 2023 (hereinafter the "Budget").

One of the proposed Budget measures offers welcome tax relief to US citizen private equity fund principals residing in the UK. This measure should help reduce the risk that a dual US/UK fund principal is "double taxed" on his or her carried interest.

By way of background, a UK tax resident who also holds US citizenship is generally treated as a tax resident of both jurisdictions and is hence subject to tax in each country on his or her worldwide income and gains. For such an individual, the only real avenue for alleviating double taxation is to rely on the "foreign tax credit" systems of each respective jurisdiction, as coordinated through Article 24 of the US-UK Double Tax Treaty.

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