Private equity bosses pay less tax than cleaners

Private equity is back in the public spotlight. City veteran Nicholas Ferguson (left) has revealed the industry's 'sweetest little secret': a loophole that allows executives to pay just 10% tax on earnings.

Private equity is back in the public spotlight. City veteran Nicholas Ferguson, chairman of investment group SVG, "has let us in on the industry's sweetest little secret", said Alex Brummer in the Daily Mail. He noted that UK tax rules allow buyout fund executives to pay just 10% on the bulk of their earnings, and that he had not heard a clear explanation of how paying "less tax than a cleaning lady" is justified. Gordon Brown has signalled a clampdown on the loophole.

Why the tax loophole arose

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