Stephen Barclay – 2015 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Stephen Barclay on 2015-02-10.

To ask Mr Chancellor of the Exchequer, what estimates his Department has made of the amount that would be raised from hedge funds, or similar financial institutions, by closing tax loopholes arising from the use of mixed membership partnerships.

Mr David Gauke

As part of the partnerships review legislation was introduced in Finance Act 2014 to prevent tax-motivated allocations of business profits in partnerships where the partners include both individuals and companies (mixed membership partnerships).

During consultation, it became apparent that the use of mixed membership partnerships by hedge funds to avoid tax was widespread. As a result, the yield scored for the measure was increased by £1.92 bn over the scorecard period. All of this additional yield relates to the hedge fund sector.