The private equity industry is bracing itself for several changes to UK tax rules, which could affect how deals are structured and be “very damaging” for private equity portfolio companies.

Many lawyers and the industry's trade body expect the government to make an early-stage announcement on changes to the tax deductibility of debt in the Budget on March 16, as part of global plans by the Organisation for Economic Co-operation and Development to crack down on tax avoidance by multinational companies.