On July 1, 2010, the House of Representatives passed an amended version of H.R. 4899 -- The Supplemental Appropriations Act of 2010 -- that includes restrictions on GRATs. The Senate will re-consider this bill.
In House Passes GRAT, Biofuel Limits in Spending Bill (Tax Notes Today, Doc 2010-14832, 2010 TNT 128-2), Chuck O'Toole informs, “[t]he House voted 215-210 to approve the resolution (H. Res. 1500) that added the tax provisions to H.R. 4899.” The text of H. Res. 1500 is available on Thomas.gov, here.
GOP.gov provides this summary of the proposed restrictions on GRATs in H.R. 4899:
Grantor Retained Annuity Trusts: The bill would require a minimum ten year term for any grantor retained annuity trust (GRAT) wherein donors place property into trust and then receive an annuity payment for a fixed period of time. GRATs are used to transfer property to family members while the donor is still alive in order to avoid double taxation in the form of the gift tax or the death tax. This provision would make the use of a GRAT less beneficial and was included in the president’s budget and referred to as closing a tax “loophole.” According to the president’s budget, the legislation would increase taxes by $2.9 billion over ten years.
(Special thanks to Jeff Cook (President and CEO, Policy and Taxation Group) for alerting me to the restrictions on GRATs in H.R. 4899.)
[Updated 7/6/10 at 2:50 PM to correct an error in the title and opening sentence. The House vote happened on July 1 and not June 1.]