American Taxpayer Relief Act

1st Jan 2013 saw the passage of the “American Taxpayer Relief Act”. The act was signed on 2nd Jan and made retrospective for one day.

The Act averted the so-called “fiscal cliff” by making permanent some of the tax cuts previously enacted by the Bush government, while increasing taxes on those individuals earning more than USD $400,000 per annum or for couples living together earning more than USD $450,000. Some taxes were increased, some deductions and credits were removed and estate duty taxes reverted to 2001 levels, but slightly modified. This means estate more than USD $500,000 will be taxable to Federal Estate Duty from now on. Rates increased progressively between USD $500,000 and USD $750,000 and USD $750,000 and USD $1 million, with all value in excess of USD $1 million, taxable at 40%. For the calculation of this tax, the estate on one’s death includes lifetime gifts made prior to death. Those who fall into the higher income brackets, or under the new estate duty rules, should seek professional advice. We will be pleased to assist on request.

The entire Act, fills 157 pages of text. We will be happy to provide a complete copy, on request!