Tax dispute could delay £9bn Alico sale
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Metlife: Alico deal still up in the air
The £9.5bn sale of AIG-owned Alico to Metlife may be delayed due to a tax dispute, according to US press reports.
The Wall Street Journal says the deal is expected to be pushed back due to confusion over the interpretation of tax rules which the Internal Revenue Service may need to make a ruling on.
The dispute is over whether Alico is exempt from a ruling which demands that US insurers withhold 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 Internal Revenue Service has refused to confirm whether this stance 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 Internal Revenue Service ruling were to find that Alico was liable to withhold the US taxes from foreign clients, this could severely curtail Alico’s ability to do business overseas.
Alico and Metlife have both declined to comment on the reports.
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