The Hiring Incentives to Restore Employment (HIRE) Act (Pub. L. No. 111-14) was signed into law on March 18, 2010. The centerpiece of the Act is the creation of tax breaks for businesses hiring new workers and extending higher expensing limits for small businesses that make capital investments. To pay for these tax breaks, however, the Act incorporates provisions of the Foreign Account Tax Compliance Act of 2009, which has far-reaching implications for foreign financial institutions that may have U.S. clients. A summary of some of the provisions that we believe would be of interest to our individual clients and their advisors is set forth below:
A. Withholding Tax Provisions
There are withholding taxes to enforce new reporting requirements on specified foreign accounts owned by specified U.S. persons or by U.S.-owned foreign entities.
Every foreign financial institution is encouraged to enter into an agreement with the United States that would require it to:
Those foreign financial institutions that refuse to enter into such an agreement are subject to withholding of 30 percent on all payments to them of U.S. source dividends, interest and similar investment income, and on the gross proceeds of all sales of U.S. securities and other assets that produce interest or dividends.
These rules are in addition to the existing Qualified Intermediary rules and are effective for payments made after December 31, 2012.
B. Foreign Trust Provisions
The provisions regarding foreign trusts have been amended to broaden the U.S. grantor trust rules as applied to a U.S. grantor of a foreign trust, tax U.S. beneficiaries on uncompensated use of trust property, and tighten the foreign trust reporting rules applicable to U.S. grantors and beneficiaries alike.
These rules are effective on the date of enactment and for transfers made or uses of property after the date of enactment, or taxable years beginning after the date of enactment, as the case may be.
C. Other Provisions of Interest
These rules are effective for taxable years beginning after the date of enactment, except for the PFIC reporting which is effective on the date of enactment.
On March 27, Warren Whitaker will be speaking on "Passing Down Your Prized Possessions: How to Avoid Fights and Fees In Your Estate," a seminar hosted by the New-York Historical Society's Planned Giving Advisory Council and held at the Robert H. Smith Auditorium in New York City.
Warren Whitaker will be serving as chair of the 15th Annual International Estate Planning Institute, hosted by the New York State Bar Association and The Society of Trust and Estate Practitioners USA (STEP USA).
On March 14, Dina Kapur Sanna spoke on a panel, "Nuts and Bolts of Domesticating Foreign Trust Structures," at the 15th Annual International Estate Planning Institute, hosted by the New York State Bar Association and chaired by Warren Whitaker.
On March 14, Emily Belfer will be speaking at the Yeshivat Chovevei Torah (YCT) Disabilities Seminar.
On January 23, Susan Ylitalo will be a guest speaker on the topic of "Estate Planning for the Business Owner" before the Estate Planning Council of Lower Fairfield County.
Day Pitney Press Release
Day Pitney's Family Office and Trusts and Estates practices have been shortlisted in two categories, "Best Private Client Law Firm" and "Best Trusts and Estates Division," for the 2019 Private Asset Management Awards.
Day Pitney's Family Office and Trusts and Estates practices have been shortlisted in the "Legal Team of the Year" private client category for the 2019 Family Wealth Report Awards.
Darren Wallace was quoted in an article, "Paul Allen's $26 Billion Estate Will Take Years to Unravel," published by Bloomberg.
On October 3, Day Pitney LLP and the Association of Corporate Counsel (ACC), Northeast Chapter – Women's Initiative co-presented a program, "The Power of Women with Wealth," held at Day Pitney's Boston office.