Big talker

8 March 2007 By Taron Wade

It s not clear what Ed Balls is trying to achieve with his shareholder loan investigation. The rules were cleared up only two years ago. Perhaps it is just a PR sop to Labour s clampdown on private equity. But the real buyout tax issues remain unaddressed.

This content is for Subscribers only

Context News

Ed Balls, HM Treasury's city minister, is making a speech today at which he will discuss a review of some tax rules relating to private equity. More specifically, the Treasury will be examining the rules that cover how a type of debt, called a shareholder loan, is taxed for private equity owned companies.

Shareholder loans are not really loans, they are part of the equity element of a private equity deal. Most of the equity that buyout firms use to pay for UK companies isn't really equity. Rather, it is advanced in the form of shareholders loans from sponsors. That means the interest paid is tax deductible.

Email a friend

Please complete the form below.

Required fields *