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17th of May 2012

Connecticut incentives for captives applicable

Vicky Beckett 03/01/2012

An Act offering incentives for establishing captives became applicable in Connecticut on January 1 2012.
 
‘An Act Promoting Economic Growth and Job Creation in the State’ was signed into law by Connecticut’s Governor Malloy in October 2011.
 
A new premium receipts tax for captive insurance companies has been expanded and thee new subgroups of captive permitted to domicile in the state are now included in the new legislation.
 
The act is effective from July 1, 2012 and applicable from January 1, 2012.
 
The three new subgroups include sponsored captives, special purpose financial captives and branch captives.
 
A captive’s ‘assumed reinsurance premiums collected or contracted for’ will be subject to the insurance premium receipts tax.
 
Previously, only a captive insurance company’s ‘direct premiums collected’ were subject to this tax.

A new first-year tax credit for captiveslicensed on or after January 1, 2012, will receive a one-time non-refundable $7,500 tax credit for the captive’s first taxable year.

 
The credit can be used against the captive’s liability for the Connecticut insurance premium receipts tax.

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