The US tax reforms incorporate a provision (Section 864(c)(8) of the U.S. Internal Revenue Code) which provides that where a non-resident disposes of an interest in any US or non-US partnership or other entity that is treated as a partnership for US tax purposes, which is carrying on a trade or business in the US, the part of any gain which is attributable to the US trade or business will be regarded as effectively connected to a US trade or business and so will be taxable. Unless the seller shows it is a US person or falls within other exemptions, the purchaser of such partnership interest is required to withhold 10% of the amount realised on the disposition, which is typically the purchase price of the interest, and remit it to the Internal Revenue Service, even if the withholding would exceed the tax due on the disposal. For further information, please contact Paul Hale or Anvit Jain.