In This Issue:
- Distinguishing Between Captive Insurance and Related Party Derivatives: Chief Counsel Advice Memorandum 201511021
- Achieving Tax-Free ‘Rollover’ Treatment for Certain Shareholders in Acquisition of Publicly Traded Target Company
- German Real Estate Transfer Tax: A Trap for the Unwary Multinational
- New IRS Rulings Should Provide Greater Certainty for Corporate Restructurings
- Excerpt from Distinguishing Between Captive Insurance and Related Party Derivatives: Chief Counsel Advice Memorandum 201511021:
Overview -
In Chief Counsel Advice (CCA) memorandum 201511021, the Internal Revenue Service (IRS) considered whether a contractual arrangement transferring foreign currency (FX) risk to a captive insurance company resulted in insurance for federal income tax purposes. After considering the tax definition of insurance, the IRS concluded that the arrangement should be taxed as a foreign currency derivative—rather than insurance—based largely on its view that the FX risk at issue did not qualify as an “insurance risk.”
The FX Arrangement -
The Taxpayer Group in the CCA is described as a group of related entities engaged in the design, manufacture, etc., of products and services in the environmental and life sciences sectors. The Taxpayer Group includes a regulated state law captive insurance company (“Captive”) that provides coverage to the Taxpayer Group for a variety of risks.
Please see full publication below for more information.