“United States: Anti-Inversion Rules Are Not Just For Mega-Mergers – Private Client Advisors Take Note”
Source: Ruchelman PLC via mondaq.com 7 December 2017
“Transactions known as corporate “inversions” or “expatriations” have made headlines for years. Recently, the proposed merger of the U.S. pharmaceutical giant Pfizer, Inc. with the Irish-based pharmaceutical company Allergan Plc was in the news. The coverage addressed the implications of creating the world’s largest pharmaceutical company, the loss of yet another American corporate behemoth to a lower-tax jurisdiction, and later, the plan’s cancellation, arguably as a result of the U.S. government’s regulatory action.
As laws limiting tax-free inversions have developed, tax attorneys specializing in corporate mergers and acquisitions have been required to keep up with regulatory developments and consider new planning techniques – but they are not the only ones with such obligations. Tax attorneys advising individuals and families who own closely-held businesses, investment structures, and even personal use property, with cross-border aspects, must also keep the inversion rules on the forefront of tax planning. In the private client setting, inversions are sometimes overlooked, perhaps because the issue is so closely associated with large “M&A” deals.
This article examines how the inversion rules can affect cross-border tax planning for individuals. It begins with a brief discussion on the development of the inversion rules over time and some of the planning techniques that have been used to address the legislative and regulatory changes.”