By Inna Ganz, USTAXFS
Since 2017, a US limited liability company (“LLC”) that is wholly owned by a non-US person, including a non-US corporation, is required to report transactions with its non-US owner and related parties to the Internal Revenue Service (the “IRS”) on Form 5472 (Information Return of a 25% Foreign-Owned US Corporation or a Foreign Corporation Engaged in a US Trade or Business).
By Tony Nunes & Lakmini Mahipala, Kelly + Partners Chartered Accountants
The term “trust” is not defined in Australian income tax law. However, an oft quoted description of a trust states it is: [an] obligation enforceable in equity which rests on a person (the trustee) as owner of some specific property (the trust property) to deal with that property for the benefit of a certain person (the beneficiary) or persons, or for the advancement of certain purposes.
By James F. Schultz, Cendrowski Corporate Advisors
This article will follow a path where the business ends up in an LLC with room to expand its business and have all future appreciation attributed to the new investors.
By Katherine Pymont, Kingsley Napley
As has been widely reported, a handwritten document by the late Aretha Franklin found at her home after she died has been determined a valid will by the US court. Franklin’s sons have been in dispute for several years over the validity of the document. Immediately following her death it was assumed that Franklin had no will, and steps were taken to administer her estate on that basis before two separate handwritten documents, one dated 2010 and the other 2014, were found at the singer’s property.
By Roberto M. Cagnazzo, Three & Partners
As with any purchase of a costly asset, the purchase of a work of art requires the due-diligence investigation that must precede the transaction, especially if it is an international purchase. The value of a work, often significant, imposes on collectors and investors a prudent approach. The purchase must be always seen from the perspective of a future sale. Certain origin, uncontested ownership, and undisputed authenticity are reflected in the value of the work of art and thus in its marketability. Due diligence consists of the procedures to verify the provenance of the work of art, its actual ownership, and authenticity in terms of originality and correct attribution.
By Katy Bolton, Nolands Taxpayer
The conduit principle is one which is well established in South African law dating as far back as 1938, introduced by the seminal case of Armstrong v Commissioner for Inland Revenue 1938 AD 343. In summary, the conduit principle states that income which has accrued to or is received by a trust on behalf of its beneficiaries retains its identity. This means that where the income vests in the beneficiaries in the same year of assessment as it accrued to the trust, such income will be taxed in the hands of the beneficiaries and not in the trust itself.
By Michael J. Borger, Moritt Hock & Hamroff LLP
One of the most fascinating quirks of the United States tax regime is that an individual may be deemed a “resident alien” domiciliary for US income tax purposes but deemed a “non-domiciliary” for US estate, gift, and generation-skipping tax purposes. Indeed, the fact that an individual holds an immigration visa or has filed US income tax returns does not necessarily establish US domicile for estate and transfer tax purposes.
By Jolene Tan, SingAlliance Pte Ltd
The cultural significance and aesthetic pleasure elicited by works of art are often why art collectors purchase them. But the perception of art has shifted in recent years. Collectors may no longer be solely motivated by the sentimental or social value of these pieces but also by the potential of art works to become working assets in their global portfolio. There are various ways to leverage the power of fine art, but this article will focus on two unique solutions – art financing and tokenisation.
By Ross Forrester, Westcourt
A common asset protection strategy in Australia is to purchase the matrimonial home in the name of the low-risk spouse. This way, if any outside creditor attacks the family's wealth, the attack is quarantined to the high-risk individual who does not own the family home. This strategy works well with a family's tax structuring, where the couple can sell their main residence free of tax, regardless of whether the family home is owned jointly, disproportionately, or in the name of only one spouse.
By Chris Humphries & Jonathan McLean, Stuarts
Clients often ask what the best ways are to structure a digital asset or Web 3.0 entity in the Cayman Islands. Despite most legislation relevant to the financial services in the Cayman Islands being written before the blockchain revolution began, the Cayman Islands has made a number of legal and regulatory advancements that make it a jurisdiction where such innovation thrives. The following article outlines the most common structures used for Web 3.0 entities in the current marketplace under the local regulatory regimes – the Virtual Asset Service Providers Act (as revised) (“VASPA”) and the Economic Substance Act (as revised) (the “ES Act”).