CGT rate changes: what’s ahead for private equity managers?

It is rumoured that the chancellor is considering equalising or reducing the gap between income tax and capital gains tax rates in the upcoming Autumn Budget. Given the efforts that have been made over the last 20 years to incentivise employee ownership, a full equalisation of rates in relation to employee equity would be significant. What could equalisation mean for management holding an interest in private equity structures? It seems unlikely that we will see a restructuring of fund managers’ carry or co-invest, but we could start to see alternative non-equity structures used for managers at portfolio company level.