Effects of the Pre-Budget Report and opportunities in Sipps

Changes to capital gains tax made in the 2007 Pre-Budget Report may impact severely on the private equity sector, bursting the bubble that has surfaced in recent times

In recent years, the private equity sector in the UK has enjoyed a boom, driven both by venture capitalists and 'business angels' (private individuals who invest smaller amounts of finance at an earlier stage). Although a number of commentators feel this bubble has now burst and a greater number have questioned the validity of the activities of venture capitalists, much money has been made and - as has been widely reported - comparatively little tax has been paid. Private equity made its name as medium- to long-term finance provided in return for an equity stake in potentially high-growth...