Grandfather clause

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Related to Grandfather rule: grandfather clause, Grandfathered in

Grandfather clause

A provision included in a new rule or regulation that exempts a business that is already conducting business in the area addressed by the regulation from penalty or restriction.

Grandfather Clause

A clause in a new law, regulation, or anything else that exempts certain persons or businesses from abiding by it. For example, suppose a country passes a law stating that it is illegal to own a cat. A grandfather clause would allow persons who already own cats to continue to keep them, but would prevent people who do not own cats from buying them. Grandfather clauses are controversial, but they are also relatively common.
References in periodicals archive ?
Although the scope of this grandfather rule is unclear, it appears that section 403(b) contacts issued and funded with Rev.
The so-called grandfather rule puts weight on the nationality of the stockholders in determining the nationality of a corporation or its compliance with laws on foreign equity limits.
A more liberal grandfather rule applies for reporting purposes (pre-2005 actual deferrals, whether or not vested, and regardless of post-October 3, 2004, material modifications) than for section 409A in general, per Q&A-28 of Notice 2005-1.
The election to use the grandfather rule had to have been made with a tax return for a year beginning no later than January 1, 1988.
This grandfather rule permits partnership status for entities that meet the following requirements --
A special grandfather rule is provided for individuals whose accrued benefits as of August 1, 1986 equaled or exceeded $562,500.
1, 1986 could have elected the grandfather rule, which exempted future distributions from the 15% excise tax if they were a recovery of benefits accrued as of Aug.
This grandfather rule will not apply, however, to agreements that are renewed after such date.