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by making a just and reasonable reallocation of part or all of the profits so that more tax is paid.
Now, if you have private equity in a mixed partnership where both companies and individuals are involved in the allocations of profit and loss, be warned. If youre distributing equity to avoid paying HMRC on an individual level, you could see your use of these tax loopholes about to close. The reason behind it, according to Danny Alexander, is encouraging firms to invest. Rather this than have money siphoned out by the well- off as a way to avoid the 45p income tax rate.
BVCA: tax loopholes are not structures designed to enable individuals to avoid tax
As you can imagine, there has been a strong rebuttal of the proposals, none stronger than those made by the BVCA. Tim Hames, Director General of the BVCA, has responded in a press release ahead of Alexanders party conference speech. Hames argues that the war cry against the wealthy is a way to whip up support from Lib Dems in Glasgow and no more. Furthermore, BVCA recognises the tax planning strategies Alexander is looking to outlaw as straightforward commercial transactions. Whether or not you believe they are tax avoidance measures, it appears that these are two more avenues that look to have tape across their entry. Its not all over yet, though. There will be an ensuing period of informal consultation availed to all parties to finalise the new guidelines. For partnerships, especially LLPs, its going to be an anxious wait for the outcome. When it comes to closing tax loopholes, the chief secretary to the Treasury means it when he says he has no hesitation in acting. photo credit: kraifreedom, freedigitalphotos.net