Effective January 1, 2017, Congress implemented critical changes to Section 831(b) of the United States Tax Code when it passed the Protecting Americans From Tax Hikes Act of 2015 (“PATH”) as part of its 2016 appropriations bill.

While the new changes increase the premium deduction from $1.2 million to $2.2 million, captives are now subject to new “diversification” requirements intended to prevent the use of captives as estate planning vehicles. All captives are subject to the new law.

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