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 January 16, Dina Kapur Sanna will be speaking on a panel, "Lose the Fear of the Foreign – Practical Planning Strategies," at the 53rd Annual Heckerling Institute.
Rebecca Tunney authored a case comment article, "Protecting Real Property from MassHealth's Estate Recovery Claim: Is it Possible?" published by the Massachusetts Law Review.
Warren Whitaker and Edda Santiago presented a webinar, entitled "A Guide to International Estate Planning for U.S. Citizens, Residents, Trusts and Assets," produced by Lawline.
Barbara Freedman Wand spoke at a program, "The Philanthropy Talk: How Do I Do It...and Why Do I Have To?," presented by The Boston Foundation in partnership with The Philanthropic Initiative, Massachusetts Society of CPAs, and the Boston Estate Planning Council.
Warren Whitaker and Edda Santiago spoke at a joint meeting of the New York Center for Financial Studies and the New York City Chapter of the Society of Financial Services Professionals on the topic of "International Estate Planning."
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.
Partner Leigh A. Newman has been selected by the Jewish Federation of Greater Hartford to receive the Jewish Federations of North America's 2019 Kipnis-Wilson/Friedland Award.