International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Friday, July 17, 2020

World Wealth Report 2020: 20 million high net wealth persons hold US$74.0 trillion

Capgemini's research based on 2019 and the first quarter of 2020 found that the wealth management industry is in the midst of great disruption as economic forces, competition from new entrants, and client expectations mount. Wealth management executives consider natural events – such as floods and pandemics – to be the number-one industry disruptor, with almost 60% rating it as high impact. Other high-impact disruptors included changing client expectations and a global economic slowdown.

The population of high net wealth individuals grew to 19.6 million persons world wide, holding US$74.0 trillion (Read the World Wealth Report 2020 here)

An analysis of the wealth management client journey revealed that firms are lagging behind in delivering personalized information and services. HNW clients are least satisfied with receiving personalized information or services during acquisition, advisory, and value-added services. This is especially concerning as these touchpoints were also found to be the most vulnerable to BigTech firms – high net worth individuals expect BigTechs to perform better than wealth management firms at these touchpoints.

Wealth management firms can mitigate BigTech incursion by boosting the wow factor at information-related touchpoints

Texas A&M University School of Law has launched its online wealth management, risk management, and international tax risk management graduate curricula for industry professionals.

Apply now for fall courses that begin August 24 on Zoom: Estate, Insurance & Annuity Planning; Financial Innovation (Derivatives and Commodities); Investment & Portfolio Management; Securities Regulation; Enterprise Risk Analytics; Information Security Risk Management; Terrorism Risk Management; International Tax Risk Management, Data, and Analytics II; International Tax & Tax Treaties I and II; among other courses...

Texas A&M University is a public university, ranked in the top 20 public universities by the Wall Street Journal / Times Higher Education university rankings, and is ranked 1st among public universities for its superior education at an affordable cost (Fiske, 2018) and ranked 1st of Texas public universities for best value (Money, 2018).

July 17, 2020 in Wealth | Permalink | Comments (0)

Tuesday, July 23, 2019

TaxFacts Intelligence Weekly of July 18, 2019 – Actionable Analysis for Financial Advisors

 

William H. Byrnes, J.D., LL.M. and Robert Bloink, J.D., LL.M.

Jul 18, 2019

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Words of Caution for Non-spouse Beneficiaries of Inherited IRAs

Generally, non-spouse beneficiaries are required to take distributions from the account either under the five-year rule (i.e., exhaust the funds within five years of inheriting them) or based on that beneficiary’s life expectancy. However, what many beneficiaries fail to understand is that when they take a distribution, that distribution will be taxable, cannot be undone by rolling the amount into another IRA and can cause the IRA to forfeit its stretch treatment. Non-spouse beneficiaries should be advised that their only opportunity with respect to rollover of an inherited IRA is to transfer the account (as an inherited account) to a new IRA custodian via a direct trustee-to-trustee transfer. For more information on inherited IRAs, visit Tax Facts Online. Read More

District Court Finds Retiree Not Entitled to Change Election Regarding Pension Distribution Form

A district court recently ruled that a pension plan did not abuse its discretion by denying the request of a participant in pay status to change her election from a monthly annuity payout to a lump sum payment. In this case, the pension had opened a window whereby retirees could elect to switch from receiving an annuity to the lump sum option. The option also allowed the participant to revoke the change by a certain set date, and revert back to the annuity. Here, the retiree and her son, who had power of attorney, took the lump sum option but later revoked it to revert back to the annuity. Later, when the retiree was diagnosed with a neurological disease, they attempted to revoke the revocation to receive the lump sum. The court held that there was no abuse of discretion in the pension’s denial of that request because the window for electing the lump sum had closed. The impact of the neurological disease was irrelevant because the son who made the initial requests had power of attorney to speak on the participant’s behalf. For more information on what to consider when facing a lump sum option, visit Tax Facts Online. Read More

Updated IRS FAQ Confirms Section 1231 Gains Invested in Qualified Opportunity Funds in 2018 are Qualifying Investments

The second round of proposed regulations regarding qualified opportunity zone fund (QOF) investments generated questions as to the treatment of Section 1231 gains that had been invested in a QOF. Section 1231 capital gain treatment generally applies to depreciable property and real property used in a business (but not land held as investment property). Under the proposed regulations, Section 1231 capital gains are only permissible QOF investments to the extent of the 1231 capital gain amount, if the investment is made within 180 days of the last day of the tax year. IRS released FAQ to provide relief for the 2018 tax year, so that investment in the QOF and deferral will be available for the gross amount of Section 1231 gain realized during the 2018 tax year if the investment was made within 180 days of the sale date, rather than the last day of the tax year (assuming that the taxpayer’s tax year ended before May 1, 2019, when the regulations were released). For more information on opportunity zones, visit Tax Facts Online. Read More

2019’s Tax Facts Offers a Complete Web, App-Based, and Print Experience

Reducing complicated tax questions to understandable answers that can be immediately put into real-life practice, Tax Facts works when and where you need it….on your desktop, at home on your laptop, and on the go through your tablet or smartphone.  Questions? Contact customer service: TaxFactsHelp@alm.com800-543-0874

 

July 23, 2019 in Wealth | Permalink | Comments (0)

Thursday, March 21, 2019

How did the TCJA impact charitable giving?

The Tax Policy Center has concluded that the 2017 Tax Cuts and Jobs Act will discourage charitable giving by reducing the number of taxpayers claiming a deduction for charitable giving and by reducing the tax saving for each dollar donated. Overall, the TCJA will reduce the marginal tax benefit of giving to charity by more than 30 percent in 2018, raising the after-tax cost of donating by about 7 percent. Unless taxpayers increase their net sacrifice—that is, charitable gifts less tax subsidies—charities and those who benefit from their charitable works, not the taxpayers, will bear the brunt of these changes.

However, what we don't know is whether the increase in the standard deduction (and thus much less need for the itemization of deductions) will lead to less charitable giving.  It may, or it may lead to less growth in charitable giving (but perhaps an acceptable trade-off for the TCJA depending on one's perspective), or it may have negligible impact.  Taxpayers may still give but of course not claim the itemized deduction.  Unlikely, I suspect, that a weekly churchgoer will stop providing for the church because of the increase in the standard deduction. 

Giving USA reported that in 2018, "Americans Gave $410.02 Billion to Charity in 2017, Crossing the $400 Billion Mark for the First Time".

Fundraising Effectiveness Project Quarterly Fundraising Report™ reported that for 2018, giving rose albeit by a modest 1.6%.  Less donors gave in 2017, but more big donors gave, and this group gave more, enough to offset the loss of small donors and grow all donations by 1.6%. 

So I think that the TCJA has had an impact, but primarily on who gives, as opposed to a reduction in overall charitable giving.  

 

March 21, 2019 in Wealth | Permalink | Comments (0)

Monday, May 21, 2018

Switzerland remains the world’s largest wealth management centre for international assets

Download Ch-fs-1800914_Deloitte-wealth-management-Ranking-2018

Swiss Info reports: A total of $1.84 trillion (CHF1.85 billion) of international assets were managed in Switzerland at the end of 2017, says the latest Deloitte Wealth Management Centre Ranking, published on Friday. Britain ($1.79 trillion) and the United States ($1.48 trillion) follow closely behind. Both countries have significantly increased their international market volume in the past seven years, by 9% and 48% respectively. Read the full story and analysis here

 

 

May 21, 2018 in Wealth | Permalink | Comments (0)

Tuesday, September 29, 2015

The Tax Boondoggle Donald Trump Should Attack, But Didn't

My new article in Forbes on Donald Trump, carried interest and 1031 exchanges.

ImgresI speak to his contrary positions on carried interest and 1031s.  "One intriguing aspect to all this is that thanks to Trump, talk of repealing the carried interest loophole has overshadowed Washington discussion of eliminating another questionable tax giveaway: section 1031Section 1031 has long been an unsupervised real estate tax boondoggle, one from which Trump has most likely benefited."

I conclude by saying "Back to Trump’s attack on carried interest for hedge fund managers: he says that they didn’t “build” anything. But 1031 isn’t a tax break for construction—it’s a benefit when you are trading one investment property for another, just as hedge fund managers trade assets.

If Trump is happy getting rid of the carried interest loophole for hedge funders, then he should be just as happy getting rid of carried interest for real estate fund managers and the even bigger 1031 loophole for real estate investors."

September 29, 2015 in Finance, Tax Compliance, Wealth | Permalink | Comments (0)