From 6 April 2026, the carried interest taxation regime will move to the income tax framework, which will see gains charged income tax and national insurance, albeit at a lower effective rate of 34% for carried interest, 2% above the current 32% CGT rate.

The new tax regime for will sit within the income tax framework, with all carried interest treated as trading profits and subject to income tax and Class 4 National Insurance contributions (NICs), the Treasury has confirmed.

Under the revised regime, income tax and NICs paid in the previous tax year on carried interest will be relevant to the calculation of any payments on account (POA) due.