The November Applicable Federal Rate (AFR) for GRATS Lowest in History Making Intra-Family Gifts Attractive
November 10, 2011
Record low interest rates, coupled with current reduced gifts tax rates, make this an ideal time for considering intra-family gift. The November 2011 applicable federal rate for Grantor Retained Annuity Trusts (GRATS), qualified personal residence trusts, and charitable trusts is the lowest in its history at 1.4%. The November annual rates for short-term, mid-term and long-term loans are 0.19%, 1.2% and 2.67%. If the actual rate of return on invested grantor trust assets or intra-family loans exceeds the applicable federal rate, excess returns may be transferred to the net generation without transfer taxes.
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