Carried interest payments to UK private equity dealmakers rose over 50% to £5.4bn in the 2024-25 tax year, ahead of new tax rules. Nearly 4,000 executives received payments, the highest since HMRC began tracking in 2017. The surge followed Labour’s 2024 election win and chancellor Rachel Reeves’ plan to increase the carried interest tax rate from 28% to 32% in April 2025, then to 34% in April 2026.

Just 230 top earners took £3.5bn of the total, indicating concentrated payouts. Only one-fifth of recipients were women. UK firms typically earn 20% of profits after a hurdle rate, with payouts calculated at fund level — unlike the US deal-by-deal model — leading to lumpier distributions.

Some firms accelerated exits by selling portfolio companies to other funds they manage, crystallising gains before higher taxes applied, even as proceeds were often reinvested.