What is an 831 b captive?
831(b) Captive — a captive that may be taxed under Internal Revenue Code § 831(b), which provides that a captive qualifying to be taxed as a U.S. insurance company may pay tax on investment income only in any year that its written premium is at or below the threshold for the applicable tax year, which in 2017 was set …
What is an 831 B plan?
831(b) is a special insurance company election allowed under the US Internal Revenue Code. It essentially makes 831(b) qualifying captives exempt from income tax except its earnings on investment. Some captive promoters may be marketing 831(b) captives as income and estate planning tax shelters.
Why are captives offshore?
Choosing to domicile your captive offshore can bring greater regulatory flexibility; offshore captives usually allow lower minimum capital requirements and may not require regulatory examinations. Some jurisdictions have developed an environment that is particularly supportive of certain types of captive.
How do cell captives work?
Cell Captives are entities consisting of a core and an indefinite number of cell entities which are kept legally separate from each other. Each cell has dedicated assets and liabilities ascribed to it, and the assets of an individual cell cannot be used to meet the liabilities of any other cell.
What is Microcaptive?
By way of background, micro-captives are being used to insure against business risks. The captive insurance company is owned by the insured or a related party. The insured claims deductions for premiums paid to the captive insurance company.
Is State Farm a captive insurance company?
What is a captive insurance agent? State Farm, Allstate, and Geico are all insurance companies that will only sell their products through their agents. They don’t permit their agents to sell any products from any other insurance companies. Hence the word captive.
