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- Scope
- The Guidelines apply to Alternative Investment Fund Managers (including internally managed AIFs), UCITS management companies, (including any UCITS which has not designated a UCITS management company), EuVECA, EuSEF and ELTIF and MMFs managers.
- The obligations under the Guidelines apply to all fund documentation and marketing communications addressed to investors or potential investors for UCITS and AIFs, including when they are set up as EuVECAs, EuSEFs, ELTIFs and MMF.
- ESMA expects fund managers to make “every effort” to comply with the Guidelines and expects competent authorities (such as the CBI and CSSF) to ensure, through their supervision, that fund managers are complying with the Guidelines.
- It is expected that around 1,702 of EU-domiciled AIFs will be affected by the new rules, including many private funds.
Timing considerations
- National competent authorities have until 21 October 2024 to notify ESMA whether they: (i) comply (ii) do not comply but intend to comply; or (iii) do not comply and do not intend to comply with the Guidelines.
- The Guidelines will apply from 21 November 2024. For any funds in existence prior to this date, a transitional period of six months applies, and these funds must comply with the Guidelines by 21 May 2025.
- The Guidelines
- If using certain terms within a fund name, under the Guidelines, this could trigger both asset allocation thresholds and asset exclusions.
The key general requirements of CPR Part 35 and its practice direction are:
- expert evidence must be independent and uninfluenced by litigation pressures;
- experts should provide objective, unbiased opinions within their expertise and refrain from acting as advocates;
- experts must consider all material facts, including those that might detract from their opinions; and
- experts should clarify when an issue falls outside their expertise or when they cannot reach a definite opinion due to insufficient information.
- There are also formalities as to the form of expert report, which must include an acknowledgement of the expert’s overriding duty to the court and curriculum vitae.
- Care must also be taken with communications with the expert.
- The instructions they receive may be disclosable and it would be counter-productive to compromise their independence.
FAQs
Income tax
Income tax
| Band | Income tax rate | Dividend tax rate |
| Basic rate | 20% | 8.75% |
| Higher rate | 40% | 33.75% |
| Additional rate | 45% | 39.35% |
In his 2022 Autumn Statement, the Chancellor announced the freezing or reduction of certain income tax thresholds and allowances. These plans were unchanged by subsequent fiscal events, meaning that:
- the income tax personal allowance (the amount of income an individual can receive free of tax – tapered for individuals with income above £100,000 and not available for non-UK domiciled individuals claiming the remittance basis of taxation) is fixed at its current level of £12,570 until April 2028;
- the higher rate threshold (the level of income above which the higher rate of 40% is charged – currently £37,700 plus the personal allowance, if available) is also fixed at its current level until April 2028;
- the additional rate threshold (the level of income at which the 45% rate starts to apply) will remain at £125,140 until April 2028; and
- the dividend allowance (the tax-free allowance for dividend income) was halved from £1,000 to £500 from April 2024.
What might a new government do?
In its 2019 manifesto, the Labour Party (led at that time by Jeremy Corbyn) promised to increase income tax rates for those earning more than £80,000 to 45%, and to introduce a new “super-rich” rate of 50% for those with an income of more than £125,000. One of Sir Keir Starmer’s key pledges in his 2020 leadership campaign was also to “increase income tax for the top 5% of earners”. More recently, however, the Labour Party has moved away from this policy. The Party’s 2024 manifesto acknowledges that the tax burden is at “a 70-year high” and promises to ensure that “taxes on working people are kept as low as possible”, with a commitment not to “increase…the basic, higher, or additional rates of income tax…”
In the run-up to the 2024 Spring Budget, it was rumoured that the Government would announce a cut to the basic rate of income tax or raise the higher rate threshold. However, no income tax changes were announced and, as set out above, the basic rate currently remains at 20% and the higher rate threshold remains frozen. The Conservative Party’s 2024 manifesto does not contain any promises to cut income tax rates; however, it does confirm that the Conservative Party will “not raise the rate of income tax”. It also proposes a new “Triple Lock Plus” for pensions, whereby both the state pension and the income tax personal allowance for pensioners will always rise with the highest of inflation, earnings or 2.5% (thereby ensuring that the state pension does not become subject to income tax).
Note, however, that other revenue-raising measures such as, for example, lowering the additional rate threshold again to bring more taxpayers into the 45% rate, have not been ruled out by either Party and therefore remain possible.
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Both the 2023 Autumn Statement and the 2024 Spring Budget announced cuts to national insurance rates. This means that, from 6 April 2024:
- the main rate of employee primary class 1 NICs dropped to 8%;
- the main rate of self-employed class 4 NICs fell to 6%; and
- compulsory class 2 NICs were abolished.
| Income tax band | Standard CGT rate | CGT rate for residential property1 | CGT rate for carried interest2 | CGT rate if Business Asset Disposal Relief or Investors’ Relief applies |
|---|---|---|---|---|
| Basic rate (20%) | 10% | 18% | 18% | 10% |
| Higher rates (40%/45%) | 20% | 24% | 28% | 10% |
1Note that the higher CGT rate on residential property gains was reduced from 28% to 24% by the 2024 Spring Budget in respect of gains arising on residential property disposals that exchange on or after 6 April 2024. Note also that, where the conditions for principal private residence relief are met, the gain arising on the disposal of an individual’s main residence is exempt from capital gains tax.
2Note that the Labour Party has proposed reforming the taxation of carried interest, as mentioned below in the “carried interest” section of this article.
It was announced in the 2022 Autumn Statement that the capital gains tax annual exempt amount (the level of chargeable gains which can be received free of tax in a tax year) would be reduced to £3,000 (for individuals and personal representatives) or £1,500 (for trustees) from April 2024. This was confirmed in the 2024 Spring Budget.
What might a new government do?
Having confirmed its support for the 2024 Spring Budget’s national insurance rate cuts, it is perhaps unsurprising that Labour’s manifesto includes a commitment not to raise national insurance rates. Since the publication of the Labour manifesto, a dossier, setting out a number of proposals for tax rises and produced by the party’s Tribune group – of which Sir Keir Starmer is a member – was leaked to the media, and it is reported to include proposals to extend national insurance to all sources of income and to working pensioners; however, Labour have stated that “none of this is Labour policy” and that the document had been rejected.
The Conservative manifesto notes the Conservative Party’s “long-term ambition…to keep cutting National Insurance until it’s gone” and, as a first step towards this, commits to reducing employee NICs by a further 2% (to 6%) by April 2027, as well as abolishing self-employed class 4 NICs entirely by the end of the next Parliament.
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Table
| Income tax band | Standard CGT rate | CGT rate for residential property1 | CGT rate for carried interest2 | CGT rate if Business Asset Disposal Relief or Investors’ Relief applies |
|---|---|---|---|---|
| Basic rate (20%) | 10% | 18% | 18% | 10% |
| Higher rates (40%/45%) | 20% | 24% | 28% | 10% |
| Income tax band | standard CGT rate | CG rate for re | CGT rate for carried interest | CGT rate if business asset dispiosal |
|---|---|---|---|---|
| Basic rate 20% | 10% | 10% | ||
| Higher rates 40%/50% | 20% | 24% | 28% | 10% |
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