Financial Times editorial: tax carried interest as income, not capital gains

From the FT’s zeitgeist-ridden editorial today:

“While much of Barack Obama’s rhetoric against private equity has the flavour of electoral pantomime, he is on firmer ground when he seeks to change the basis on which carried interest is taxed. There can be no justification for it being treated on the same basis as capital gains, rather than as income.

True, technically speaking, these profits are capital gains in that they arise from a capital investment. But as they are mainly gains on others’ capital, which private equity partners only receive by virtue of the jobs that they do, this is to all intents and purposes a payment for their services. As such, it should be taxed as income.”

 See also: “A self-righteously anal, thin-lipped, Whitest Kids U Know penny pincher who’d be honored to tell Oliver Twist there’s no more soup left”

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Listings: FSA consults on free float and controlling shareholder rule changes

In a new consultation paper published today, the Financial Services Authority – in its guise as the UK Listing Authority – has announced that it is consulting on:

• changes to the free float requirements for both the premium and standard listing segments on the Main Market; and
• introducing a new controlling shareholder concept.

Improving communications to audit committees and auditor reporting: Revised auditing standards

The Financial Reporting Council issued on 28 September 2012 revised auditing standards which aim “to enhance communications to audit committees and auditor reporting”. From the FRC press release: