startCarried interest & losses offset
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Carried interest & losses offset

CCH Personal Tax
Last update: Reading time 2 minutes
LossesInterestCapital Gains
    Carried Interest, introduced in 2017 Tax returns, is a share of profits paid to investment managers in excess of their contribution. It’s taxed at 28% under CGT.

    The concept of Carried Interest was introduced into the 2017 Tax returns by HMRC. It is a share of the profits of an investment paid to the investment manager in excess of the amount that the manager contributes to the partnership, specifically in alternative investments i.e. private equity and hedge funds.
    Carried interest is chargeable to Capital Gains Tax and is taxed at 28%. 
    CCH Personal Tax allows losses brought forward, in year losses and the Annual CGT exemption to be allocated against carried interest gains.

    Data Entry

    When entering Carried Interest gains the asset type to be used is Residential Property.
    Select the Full Details option and enter details of the gain as follows:  
     

    Personal_Tax_Tax_Return_Data_Entry__Carried-Interest-And-Losses-Offset_1.png
    The field for reporting Carried interest has been moved and now appears between Cost and Reliefs.

    Note: To facilitate date entry Proceeds/Cost and Carried interest are mutually exclusive. Where an entry exists in either the Proceeds or Cost fields Carried interest is greyed out and disabled and vice versa.

    Allocation against losses

    Carried interest now appears in the loss allocation grid and losses and the annual exemption are able to be allocated against a Carried interest gain:

    Personal_Tax_Tax_Return_Data_Entry__Carried-Interest-And-Losses-Offset_2.png

    Schedules

    Personal_Tax_Tax_Return_Data_Entry__Carried-Interest-And-Losses-Offset_3.png
    Personal_Tax_Tax_Return_Data_Entry__Carried-Interest-And-Losses-Offset_4.png

    For Carried interest, Proceeds / Costs are not shown; and for the loss allocation this shows the losses allocated against Carried interest.

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