By Mathew Macdonald A bill before the US Congress threatens the status of Bermuda and other offshore centres as tax havens for wealthy Americans.

The amendment to the Internal Revenue Code 1986 would require any trust with an American beneficiary to be registered in the United States. And it would require taxes to be paid on proceeds from the trust payable to the US beneficiary.

On top of the tax implications, the bill has important implications for confidentiality of trusts, since the amount of money or property transferred to a trust, and the identity of trustees and beneficiaries must all be reported to American authorities.

Included in the bill is a new tax which will discourage US citizens from moving to Bermuda by taxing capital gains on their assets at a rate of 28 to 30 percent.

By placing assets in overseas trusts like ones in Bermuda, wealthy Americans can avoid taxes while still receiving cash payments from the trusts as beneficiaries. The bill, if passed, would make such trusts taxable for the first time.

The impact was still being assessed in Bermuda yesterday and reactions from local businesses were muted. But top financiers were concerned.

"This will radically change the business,'' said Mr. Alan Covill of The Bermuda Commercial Bank. "It will impact on the numbers of people moving here from the US.'' Mr. Cummings Zuill of the Bank of Bermuda was "very distressed'' by the bill.

"There is a great deal of international trust dealings related to the US,'' Mr. Zuill said. "This new bill taxes both inbound and outbound trusts and puts estate planning for families at risk. This bill is not an example of the way the world operates. The US has gone over the top.'' The new bill, introduced to Congress in February, stings the banks' overseas trust departments. But the shock would not stop there.

Overseas trust companies, lawyers, bankers, investors and accounting companies all over the Island would suffer from a loss of overseas trusts being opened on the Island.

Bermuda's realtors would also lose out on the number of non-Bermudians buying expensive houses on the local market.

Finance Minister the Hon. David Saul was not fazed by the new bill. "We haven't been in the business of US overseas trusts,'' he said.

But one source said the number of overseas trusts in Bermuda was in the thousands. Because no registration or fee is required, a number was not available from Government yesterday.

A reporting rule in the bill would force unwanted connections with the Internal Revenue Service departments. And it could result in the added expense of appointing a US agent to do filing work.

Reporting rules in the bill also would end the confidentiality that are among the hallmarks of such trusts, requiring financial details to be turned over to American authorities.

It sets a fine for not reporting of $10,000 for every 30-day period.

Although the IRS has no jurisdiction in Bermuda, beneficiaries of the trust still resident in the US or with assets there would be held liable.