Sale of Alico to Metlife may be delayed due to tax dispute
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The £9.5bn sale of AIG-owned Alico to Metlife may be delayed due to a tax dispute, according to reports.
The Wall Street Journal reports that the deal is expected to be pushed back due to a tax dispute which the Internal Revenue Service may need to make a ruling on.
The dispute is over whether or not Alico can remain exempt from a ruling which demands that US insurers withold US taxes on income paid out to foreign clients with annuity and life insurance products.
Alico has operations in 50 countries worldwide and most of its business comes from overseas clients, so it has considered itself to be exempt from the tax ruling, but the IRS has refused to confirm whether this is correct.
The US Government has refused to provide assurances that Metlife would not be hit with a huge tax liability if it took on Alico’s business.
If an IRS ruling were to find that Alico was liable to withold the US taxes from foreign clients, this could severely curtail Alico’s ability to do business overseas.
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