The Protecting Americans from Tax Hikes Act of 2015 created changes for Section 831(b) that take effect January 1, 2017. These changes are intended to eliminate the use of the micro captive insurance structure as a way of distributing wealth to heirs without being subject to either estate or gift taxes, which U.S. Congress deemed to be abusive.
In light of these statutory changes, captive owners should be aware of some important options to ensure their captive complies with the new law:
- Change the ownership
- Surrender the captive’s license
- Forgo the Section 831(b) election
Alan Fine, Partner in Charge, Captive Insurance Advisory Services, recently discussed these options in Captive Insurance Times.
If you have questions or concerns about your captive insurance company, contact Alan at 314.983.1292 or firstname.lastname@example.org.