Jameson Lloyd, Partner in S&C’s Tax Group, spoke with Law360 about the U.S. Treasury Department’s recently proposed regulations concerning a new stock buyback excise tax. He offered perspective on the elimination of the “per se” rule, calling it a welcome development to foreign-parented groups. However, “there is still very significant concern that in practice, the [proposed] principal purpose rule will continue to create a substantial amount of uncertainty, as well as compliance burdens.”
Jameson also highlighted the potential for additional guideposts from the Treasury, especially around factors relevant in applying the principal purpose analysis, “particularly those that would mitigate concerns that the mere fungibility of cash could result in a broad application of the principal purpose rule.”
Read “Latest Stock Buyback Tax Rules May Still Have Wide Reach”