These agreements between the BVCA and the UK tax authority are to help our members on specific technical issues. If you need any further information, please contact our policy team.
 

Foreign Limited Partnerships

Text agreed by the BVCA with clarification from the Inland Revenue following the Finance Act 2003 concerning Collective Investment Schemes.

 

Memoranda of Understanding

Set out below are two Memoranda of Understanding agreed between the Inland Revenue and the Taxation Committee of the BVCA covering the income tax treatment of management equity in private equity transactions, the use of limited partnerships as private equity investment funds and associated matters. If you require further advice or information about the Memoranda of Understanding you should consult your own professional advisers.

The legislation in Schedule 22, Finance Act 2003 is designed to deliver the policy of subjecting to tax, and national insurance contributions, value obtained as a result of acquiring securities by reason of employment. The legislation is designed to ensure that value from capital growth is not caught. However, in complex arrangements, such as those described in these memoranda, the divide between capital growth and value obtained as an employee is not easily identifiable. These memoranda have been drawn up to give some clarity in this area for the majority of straightforward cases. Where the circumstances of any particular case are different then the tax consequences will need to be considered in the light of the particular facts.

Disclaimer:
The BVCA and its employees, Council and committee members accept no responsibility of any kind for any action taken by any person as a result of these memoranda.

 

The Use of Limited Partnerships

Statement approved by the Inland Revenue and the Department of Trade and Industry on the use of limited partnerships as private equity investment funds.

For venture capital and private equity fund managers. Last updated in May 1987.