To ask the Chancellor of the Exchequer what estimate he has made of the loss in revenue to the Exchequer from private equity businesses offsetting debts on one business in their ownership against profits elsewhere in their ownership to minimise or eliminate tax liability in each of the last five years. (152613)

Interest on debt is in general treated as a business expense for tax purposes. Most major tax systems adopt the same approach and international capital markets and global businesses are structured on this basis. There are no plans to review this fundamental principle. However, on the 8 March 2007 Government announced a review of the tax treatment of the use of shareholder debt to replace the equity element in highly leveraged deals.

There is no special interest tax relief for private equity-owned companies, the tax rules apply to all companies regardless of ownership.

As HMRC does not specifically take into account private equity backed companies in their tax records it is not possible to provide this estimate.