US Tax - Biden's Tax Proposals

Ed Rieu, our US Tax Specialist, discusses the recent US tax announcements:

'Significant proposals have been made by the Biden Administration. Whether these will be passed remains to be seen, but I have detailed the noteworthy proposals below:

Capital Gain Tax Increase

The first big deal is the proposal to increase the tax rate on capital gains from the current max of 20% to ordinary income tax rates, the maximum being proposed to be increased to 39.6%, where total income and gains is over $1,000,000.  Now for the good news, the proposal calls for a retroactive date of, it is believed, 21 April 2021. I say it is believed because there is rumour it could be applied as far back as April 2020 (this latter date is highly unlikely). The whole retroactive date idea while possible is unlikely.

US Estate Tax

Also proposed is that the basis step up on death be removed so those who die with a taxable estate (currently value of @$11.5) will pay tax at rates to 40% (over $1m value) and beneficiaries will pay tax on gain on the sale of inherited property. This one has a bit of momentum and I will keep you posted as this unfolds in the fall.'

Should you wish to discuss anything in more detail please contact Ed Rieu, US Tax Specialist. Alternatively, you can complete our online contact form, email us at enquiries@sopherco.com or call 020 8207 0602.