Because of this, under some circumstances personal holding companies
can function as a particularly effective means of transferring future appreciation to other family members.
As long as a foreign trust accumulates rather than distributes income, does not receive U.S.-source income, and does not invest in foreign personal holding companies
or control foreign corporations, neither the trust nor its U.S.
Prior to enactment of the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA), the personal holding company provisions imposed a tax at the highest individual income tax rate, separate and in addition to the existing corporate tax on specifically defined undistributed income of personal holding companies
. However, under JGTRRA, the personal holding company tax was reduced and, for tax years beginning after 2002, the personal holding company tax is imposed at the rate of 15% of the undistributed personal holding company income, in addition to the regular corporate income tax and the minimum tax on certain tax preference items.
(7) The term does not include passive foreign investment companies, foreign investment companies, and foreign personal holding companies
The rules related to foreign personal holding companies
(FPHC) and foreign investment companies (FIC) have been repealed, and the AJCA makes a number of housekeeping changes to the Subpart F provisions of the IRC to prevent abuses.
The bills contain a provision that eliminates the rules applicable to foreign personal holding companies
and foreign investment companies, excludes foreign corporations from the application of the personal holding company rules, and includes as subpart F foreign personal holding company income personal services contract income that is subject to the present-law personal holding company rules.
IRC section 1246(b) foreign investment companies, IRC section 1297 passive foreign investment companies (PFIC), and IRC section 552 foreign personal holding companies
(FPHC) do not qualify.
The rather complex transaction involves BSCH exchanging 1.6% of its capital for a 40% stake in the personal holding companies
of businessman Antonio Champalimaud, who controls Mundial Cofianca.
The tax applies to all corporations except personal holding companies
, foreign personal holding companies
, exempt organizations and passive foreign investment companies, all of which are subject to special rules.
Answer--IRC Section 541 imposes a 15% (in 2006) tax on companies classified as personal holding companies
. The tax applies to undistributed personal holding company income and is designed to discourage the use of corporations as "incorporated pocketbooks" wherein income from securities, real property, or personal talents is taxed at corporate rates rather than individual rates.
shareholders on income that has not been repatriated: the rules for (1) CFCs, (2) foreign personal holding companies
(FPHCs) and (3) passive foreign investment companies (PFICs).
It said it was not analysing the deal "in the light of competition rules relative to the concentration of undertakings".In what is already being called a test case, Mr Van Miert had asked for a detailed explanation of Lisbon's opposition to a merger, under which BSCH would exchange 1.6% of its capital for a 40% stake in the personal holding companies
of businessman Antonio Champalimaud, who controls Portugal's third largest financial group.