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One minute with... Stephen Pevsner

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What’s keeping you busy at work?
I am currently working on the tax aspects of a range of transactions based around private asset management, which make up the core of our practice in London. This includes establishing an African focused private equity fund, a large GP led secondary fund transaction and a number of smaller, more bespoke co-investments; and advising a credit fund lender on a loan to a private equity backed acquisition, a number of management equity incentive arrangements and a management team on the intricacies of the new carried interest rules.
What Budget measure caught your eye and why?
The obvious point of interest was the startling incompetence in announcing the headline self-employed NICs increase and then immediately withdrawing it at the first sign of media pressure. Maybe, though, this just highlights the real level of independence between the Treasury and the rest of government, which we should find comforting as a general tax policy matter. The more significant issue is the immediate introduction of the interest deduction restriction and carried forward loss restriction rules as a voluntary early BEPS adopter and the significant additional compliance burden that these rules are going to impose on UK companies.
Are there any proposed tax measures that are of particular concern?
Working in the private fund market, the original tone of the consultation on partnership tax. The statement in the Budget that the government would soon publish its response and draft legislation, has raised concern that this might result in damage to UK limited partnerships as investment fund vehicles. Hopefully though the government will have listened to industry concerns in this regard and will ensure that any changes improve, rather than damage, the UK as a natural jurisdiction for fund vehicles, and HMRC’s summary of responses to the consultation published on 20 March provides some comfort in this regard.
If you could make one change to UK tax law or practice what would it be?
I would try to move away from the current practice of introducing very broadly drafted and defensive legislation with taxpayer comfort (if you can call it that) coming from HMRC guidance. I would move towards a process that allowed more thought and time to be given to developing new law, so that it could be more precisely targeted.
Can you explain a trend in the market that is currently impacting your clients.
The past few years have proved challenging for the UK asset management and investment fund sector with a number of legislative changes to the taxation of fund returns and carried interest, particularly for non-domiciles. The latest is the possibility that UK-based general partners will be adversely (and unreasonably) impacted by the carried forward loss restriction rules, and it can only be hoped that the government gives careful consideration to whether these constant changes might act to drive an important part of the industry out of the UK.
Finally, you might not know this about me but …
I am the proud holder of the 2010 Welbeck Hotel award for fastest visiting first time finisher in the Isle of Man’s annual Parish Walk. As my daughters tell me, this is a very specific subset of fastest finisher.  
Issue: 1347
Categories: One minute with