Interest in private equity can be highly valuable but extremely complex assets with returns structured in a manner unique to private equity. Private equity investors typically make investments of their own cash into the funds they manage on arm's length terms (co-invest) which is then supplemented with enhanced returns where funds perform particularly well and meet pre-determined thresholds (carried interest).

Complexity arises in determining whether the returns are capital in nature or employment related and therefore whether they can be considered to be part of the divorce settlement. Furthermore, the fund cycle is often at least five years in length, so consideration needs to be made to future returns as well as those already agreed.

We can assist in determining the tax identity of crystalised and future private equity returns and assist your solicitor in their understanding of the extent to which such investments can be included within the divorce settlement.