Key takeaways

• In today’s Summer Budget the UK government has taken further steps to move the UK towards tax haven status by announcing a cut in corporation tax to 18%.
• Despite this bold move to lower the UK tax rate, the UK government has made the tax environment less friendly for asset managers. Changes in the way that carried interest is taxed in the UK come into effect tonight and will result in a higher effective tax rate for private equity executives. A Consultation was also launched today regarding the taxation of performance related returns paid to asset managers, which seeks to bring more returns into the higher tax rates of income tax rather than capital gains tax.
• UK tax resident individuals who are not domiciled in the UK are going to be subject to more restrictive rules regarding their qualification for the favourable UK tax treatment which is currently available to such people.