BPF Budget Analysis: Autumn 2025

5.67 Carried interest taxation reform – The government will reform the way carried interest is taxed, ensuring that this is in line with the economic characteristics of the reward. From April 2026, all carried interest will be taxed within the income tax framework, with a 72.5% multiplier applied to qualifying carried interest that is brought within charge. As an interim step, the two Capital Gains Tax rates for carried interest will both increase to 32% from 6 April 2025. The government will also consult on introducing further conditions of access into the regime.

BPF comments:

The interim Capital Gains Tax Rate of 32% is not out of line with other countries’ tax rates on similar carried interest payments – and reflects the Government’s desire to balance ‘fairer and more sustainable outcomes, while safeguarding the strength of the UK as a fund management hub’. We await to see the detail of the further conditions for accessing the carried interest regime which will be consulted on in due course – while the ongoing uncertainty is not helpful to investors, it is important for complex tax changes to be appropriately consulted on.

4.60 Providing an additional £3 billion of support for SMEs and the Build to Rent sector, in the form of housing guarantee schemes, allowing developers to access lower-cost loans and support the delivery of tens of thousands of new homes.

BPF comments:

This additional funding is an amalgamation of two distinct pots of funding. The first is around 2bn worth in the form of the PRS Debt Guarantee fund which has been reopened for applications. The second is the £1bn ENABLE Guarantee program that encourages lending to SMEs the UK. 

We are very pleased that the government has reopened the PRS Debt Guarantee fund—one of the key asks in our manifesto. We now urge the government to adjust the scheme’s rules and structure to better support the needs of a more mature Build-to-Rent (BtR) market. This includes exploring the scheme's potential for development financing, modernizing key lending criteria, and introducing a long-term debt facility to mitigate development risks and reduce the need for unpredictable refinancing.

5.149  Reduced right to buy discounts and 100% retention of right to buy receipts for local authorities. Reducing discounts on the Right to Buy scheme and enabling councils in England to keep all the receipts generated by sales will deliver on the government’s manifesto commitment to protect existing council housing stock and boost council capacity to ensure that vital social housing is available to those who need it most.

BPF comments:

Overall a positive step that whilst not directly impacting our members is an important win that will help bolster affordable housing accounts potentially leading to greater development.

5.67 Carried interest taxation reform – The government will reform the way carried interest is taxed, ensuring that this is in line with the economic characteristics of the reward. From April 2026, all carried interest will be taxed within the income tax framework, with a 72.5% multiplier applied to qualifying carried interest that is brought within charge. As an interim step, the two Capital Gains Tax rates for carried interest will both increase to 32% from 6 April 2025. The government will also consult on introducing further conditions of access into the regime.

BPF comments:

The interim Capital Gains Tax Rate of 32% is not out of line with other countries’ tax rates on similar carried interest payments – and reflects the Government’s desire to balance ‘fairer and more sustainable outcomes, while safeguarding the strength of the UK as a fund management hub’. We await to see the detail of the further conditions for accessing the carried interest regime which will be consulted on in due course – while the ongoing uncertainty is not helpful to investors, it is important for complex tax changes to be appropriately consulted on.

4.60 Providing an additional £3 billion of support for SMEs and the Build to Rent sector, in the form of housing guarantee schemes, allowing developers to access lower-cost loans and support the delivery of tens of thousands of new homes.

BPF comments:

This additional funding is an amalgamation of two distinct pots of funding. The first is around 2bn worth in the form of the PRS Debt Guarantee fund which has been reopened for applications. The second is the £1bn ENABLE Guarantee program that encourages lending to SMEs the UK. 

We are very pleased that the government has reopened the PRS Debt Guarantee fund—one of the key asks in our manifesto. We now urge the government to adjust the scheme’s rules and structure to better support the needs of a more mature Build-to-Rent (BtR) market. This includes exploring the scheme's potential for development financing, modernizing key lending criteria, and introducing a long-term debt facility to mitigate development risks and reduce the need for unpredictable refinancing.

5.149  Reduced right to buy discounts and 100% retention of right to buy receipts for local authorities. Reducing discounts on the Right to Buy scheme and enabling councils in England to keep all the receipts generated by sales will deliver on the government’s manifesto commitment to protect existing council housing stock and boost council capacity to ensure that vital social housing is available to those who need it most.

BPF comments:

Overall a positive step that whilst not directly impacting our members is an important win that will help bolster affordable housing accounts potentially leading to greater development.

5.67 Carried interest taxation reform – The government will reform the way carried interest is taxed, ensuring that this is in line with the economic characteristics of the reward. From April 2026, all carried interest will be taxed within the income tax framework, with a 72.5% multiplier applied to qualifying carried interest that is brought within charge. As an interim step, the two Capital Gains Tax rates for carried interest will both increase to 32% from 6 April 2025. The government will also consult on introducing further conditions of access into the regime.

BPF comments:

The interim Capital Gains Tax Rate of 32% is not out of line with other countries’ tax rates on similar carried interest payments – and reflects the Government’s desire to balance ‘fairer and more sustainable outcomes, while safeguarding the strength of the UK as a fund management hub’. We await to see the detail of the further conditions for accessing the carried interest regime which will be consulted on in due course – while the ongoing uncertainty is not helpful to investors, it is important for complex tax changes to be appropriately consulted on.

4.60 Providing an additional £3 billion of support for SMEs and the Build to Rent sector, in the form of housing guarantee schemes, allowing developers to access lower-cost loans and support the delivery of tens of thousands of new homes.

BPF comments:

This additional funding is an amalgamation of two distinct pots of funding. The first is around 2bn worth in the form of the PRS Debt Guarantee fund which has been reopened for applications. The second is the £1bn ENABLE Guarantee program that encourages lending to SMEs the UK. 

We are very pleased that the government has reopened the PRS Debt Guarantee fund—one of the key asks in our manifesto. We now urge the government to adjust the scheme’s rules and structure to better support the needs of a more mature Build-to-Rent (BtR) market. This includes exploring the scheme's potential for development financing, modernizing key lending criteria, and introducing a long-term debt facility to mitigate development risks and reduce the need for unpredictable refinancing.

5.149  Reduced right to buy discounts and 100% retention of right to buy receipts for local authorities. Reducing discounts on the Right to Buy scheme and enabling councils in England to keep all the receipts generated by sales will deliver on the government’s manifesto commitment to protect existing council housing stock and boost council capacity to ensure that vital social housing is available to those who need it most.

BPF comments:

Overall a positive step that whilst not directly impacting our members is an important win that will help bolster affordable housing accounts potentially leading to greater development.

5.67 Carried interest taxation reform – The government will reform the way carried interest is taxed, ensuring that this is in line with the economic characteristics of the reward. From April 2026, all carried interest will be taxed within the income tax framework, with a 72.5% multiplier applied to qualifying carried interest that is brought within charge. As an interim step, the two Capital Gains Tax rates for carried interest will both increase to 32% from 6 April 2025. The government will also consult on introducing further conditions of access into the regime.

BPF comments:

The interim Capital Gains Tax Rate of 32% is not out of line with other countries’ tax rates on similar carried interest payments – and reflects the Government’s desire to balance ‘fairer and more sustainable outcomes, while safeguarding the strength of the UK as a fund management hub’. We await to see the detail of the further conditions for accessing the carried interest regime which will be consulted on in due course – while the ongoing uncertainty is not helpful to investors, it is important for complex tax changes to be appropriately consulted on.

4.60 Providing an additional £3 billion of support for SMEs and the Build to Rent sector, in the form of housing guarantee schemes, allowing developers to access lower-cost loans and support the delivery of tens of thousands of new homes.

BPF comments:

This additional funding is an amalgamation of two distinct pots of funding. The first is around 2bn worth in the form of the PRS Debt Guarantee fund which has been reopened for applications. The second is the £1bn ENABLE Guarantee program that encourages lending to SMEs the UK. 

We are very pleased that the government has reopened the PRS Debt Guarantee fund—one of the key asks in our manifesto. We now urge the government to adjust the scheme’s rules and structure to better support the needs of a more mature Build-to-Rent (BtR) market. This includes exploring the scheme's potential for development financing, modernizing key lending criteria, and introducing a long-term debt facility to mitigate development risks and reduce the need for unpredictable refinancing.

5.149  Reduced right to buy discounts and 100% retention of right to buy receipts for local authorities. Reducing discounts on the Right to Buy scheme and enabling councils in England to keep all the receipts generated by sales will deliver on the government’s manifesto commitment to protect existing council housing stock and boost council capacity to ensure that vital social housing is available to those who need it most.

BPF comments:

Overall a positive step that whilst not directly impacting our members is an important win that will help bolster affordable housing accounts potentially leading to greater development.

5.67 Carried interest taxation reform – The government will reform the way carried interest is taxed, ensuring that this is in line with the economic characteristics of the reward. From April 2026, all carried interest will be taxed within the income tax framework, with a 72.5% multiplier applied to qualifying carried interest that is brought within charge. As an interim step, the two Capital Gains Tax rates for carried interest will both increase to 32% from 6 April 2025. The government will also consult on introducing further conditions of access into the regime.

BPF comments:

The interim Capital Gains Tax Rate of 32% is not out of line with other countries’ tax rates on similar carried interest payments – and reflects the Government’s desire to balance ‘fairer and more sustainable outcomes, while safeguarding the strength of the UK as a fund management hub’. We await to see the detail of the further conditions for accessing the carried interest regime which will be consulted on in due course – while the ongoing uncertainty is not helpful to investors, it is important for complex tax changes to be appropriately consulted on.

4.60 Providing an additional £3 billion of support for SMEs and the Build to Rent sector, in the form of housing guarantee schemes, allowing developers to access lower-cost loans and support the delivery of tens of thousands of new homes.

BPF comments:

This additional funding is an amalgamation of two distinct pots of funding. The first is around 2bn worth in the form of the PRS Debt Guarantee fund which has been reopened for applications. The second is the £1bn ENABLE Guarantee program that encourages lending to SMEs the UK. 

We are very pleased that the government has reopened the PRS Debt Guarantee fund—one of the key asks in our manifesto. We now urge the government to adjust the scheme’s rules and structure to better support the needs of a more mature Build-to-Rent (BtR) market. This includes exploring the scheme's potential for development financing, modernizing key lending criteria, and introducing a long-term debt facility to mitigate development risks and reduce the need for unpredictable refinancing.

5.149  Reduced right to buy discounts and 100% retention of right to buy receipts for local authorities. Reducing discounts on the Right to Buy scheme and enabling councils in England to keep all the receipts generated by sales will deliver on the government’s manifesto commitment to protect existing council housing stock and boost council capacity to ensure that vital social housing is available to those who need it most.

BPF comments:

Overall a positive step that whilst not directly impacting our members is an important win that will help bolster affordable housing accounts potentially leading to greater development.