Financial – Apple Crosstech http://applecrosstech.com/ Fri, 18 Jun 2021 22:32:02 +0000 en-US hourly 1 https://wordpress.org/?v=5.7.2 http://applecrosstech.com/wp-content/uploads/2021/04/apple-crosstech-icon-150x150.png Financial – Apple Crosstech http://applecrosstech.com/ 32 32 Parents: Should You Buy a Bigger Home for Distance Learning? http://applecrosstech.com/parents-should-you-buy-a-bigger-home-for-distance-learning/ Tue, 09 Mar 2021 10:56:51 +0000 http://applecrosstech.com/parents-should-you-buy-a-bigger-home-for-distance-learning/

Need to change your size? You’re not alone

The pandemic has caused many homeowners and tenants to reassess what kind of living space they need.

This is especially true for working parents and families with children who are just starting distance learning.

A larger house with offices, a learning space, and lots of soundproof walls probably looks ideal.

Of course, moving during COVID won’t make sense for everyone.

But the good news is that low mortgage rates make increasing enrollment affordable for many.

Here’s what to know before making your decision.

Check your eligibility to buy a home (June 18, 2021)


In this article (Skip to …)


How COVID Changed the ‘Dream Home’

Tyler Forte, CEO of Felix Homes, says he’s seen a lot of homeowners looking to increase their size lately.

“Based on our daily research with home buyers and sellers, we found that around 17% of all buyers are currently moving because they are looking for a larger home that is more suitable for learning or working. at home, ”he says.

Strong note that these buyers are prioritizing properties that have an office, loft, or other space where children can comfortably participate in online learning.

“We’ve also seen many owners choose to stay put, but convert guest rooms into offices,” Forte adds.

“Some go so far as to renovate their homes to build a space they can use for work or school.”

>> Related: The 6 best home improvement loans

Aside from the additional learning space, many families find that they just need more breathing space in their homes.

“Very few parents have purchased their homes anticipating the demands of the COVID-19 lifestyle. The house that could have been vacant eight to 12 hours a day is now in use 24/7, ”says the real estate agent and attorney. Bruce ailion.

“For many families, not only are the kids at home trying to learn, but one or both parents can also share the space,” he continues. This can put a strain on parents and children.

Check your new rate (June 18, 2021)

Benefits of moving now

Moving during the pandemic can seem extremely stressful. And there will definitely be some sticky parts to the process (as with any movement).

But there are also some unique advantages of moving now.

Treat yourself to a bigger home with cheaper property taxes

Kimball lewis, CEO of EmpoweringParents.com, recently bought a bigger house.

“Having a private home office away from the hustle and bustle of home was essential. And since we teach our children at home, it was also important to have a central workplace for the children that was not their bedroom, ”he says.

“We bought a bigger house than we would otherwise have for these reasons. And we could easily afford the bigger house because we moved to a nearby town with significantly lower property taxes.

“We could easily afford the bigger house because we moved to a nearby town with significantly lower property taxes” -Kimball Lewis, CEO, EmpoweringParents.com

Lewis points out that parents who plan to teach their children themselves, and work from home anyway, can save tens of thousands of dollars by living a little further out of town and in an area with property taxes. are lower.

“Property taxes basically pay for the school system. So if you don’t send your kids to public school because you’ve decided to educate them yourself, there’s no need to pay a premium, ”says Lewis.

Flexible working arrangements make the move possible

This strategy makes sense to many people who would not have considered it a few months ago, thanks to the new flexibility of the workplace.

Ethan Taub, CEO of Loany, says ideal candidates for relocating to accommodate distance education are parents with flexible working arrangements.

“The best people for this strategy would be those who regularly work from home or run their own businesses that give them the flexibility to work at times that are most convenient for them,” says Taub.

” What am I do not hearing buyers today, ”adds Ailion,“ is that they want to move to be closer to work. “

Low mortgage rates increase the purchasing power of a home

Many experts believe that anyone could be a good prospect for this strategy.

“With today’s lowest interest rates, everyone is a candidate to improve their housing situation,” says Ailion.

“It could mean moving to a better school district with more desirable distance learning systems in place or getting a bigger house or yard.”

Forte says he mainly sees this trend in parents who currently live in a more urban setting, but want to move to the suburbs or a rural part of town.

Find out how much house you can afford (June 18, 2021)

What to consider before moving

There are always a lot of things to consider before deciding to move, especially if you have to put your current home on the market.

“Buying another house with more square footage doesn’t necessarily mean you’ll get what you need,” warns Daniel Beer, CEO / Founder of Beer Home Team of eXp Realty, Inc.

“Parents need to focus on the functionality and layout of their next home. Think about how many kids you have, how many bedrooms and home offices you need, and what kind of space you want for your kids while they learn at home.

Parents should also consider what to do with the extra space once the coronavirus is no longer a concern. Will the bigger house make sense in the long run?

Parents also need to consider what to do with the extra space once the coronavirus is no longer a problem and their children return to a brick and mortar school.

Ask yourself if the bigger house will make sense in the long run? Is it a smart investment?

“This shouldn’t be a problem if you plan to use the extra space for something else later, like a bonus room or game room,” suggests Forte.

Another factor is the stability of employment and the state of the economy.

“We continue to see millions of people lose their jobs and have to look for another job. So what might work now may not work a few months later, ”says Taub.

Compare the prospect of a new, larger mortgage to your expected job stability. If there is a likelihood that you will be laid off or your hours reduced in the near future, a new mortgage might not make sense.

Tips for buying a home during a pandemic

In addition, develop prudent strategies for the following:

  • Put your house on the market while buying another – “Don’t expect a quick move.” The pandemic has created an atmosphere of nervousness among people looking to buy a home, so the time it takes to sell your existing home may be slower than you think, ”says Taub.
  • Finding the best type of mortgage – “Working with a good mortgage broker will be the ideal situation here,” adds Taub. You may want to consider a FHA home loan, which has a low down payment requirement. Or, if you are considering relocating to a rural / suburban area, take a closer look at a USDA loan without down payment, which requires you to sell your current home to qualify
  • Make sure you have access to the right equipment – Including proximity to community services, medical care and public services. “A strong Wi-Fi connection is the key. If you are learning or working from home, you will need a robust internet connection and a good Wi-Fi point. Find out if this is available where you plan to move, ”recommends Taub

For more information on buying, selling and moving during the COVID pandemic, check out this page COVID guide and your mortgage.

Find an affordable mortgage

There is a huge benefit to buying a home in the midst of this pandemic.

Mortgage rates are still close to their historic lows. This means homebuyers can afford bigger homes – with smaller monthly budgets – than ever before.

The amount you will be eligible for depends on your down payment, your credit and your new mortgage rate.

So if your goal is to increase your size, shop around with a few lenders to see who can offer you the lowest rate and the biggest home purchase budget.

Check your new rate (June 18, 2021)

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What is Aave? A look at the budding DeFi lending platform http://applecrosstech.com/what-is-aave-a-look-at-the-budding-defi-lending-platform/ Tue, 09 Mar 2021 10:56:50 +0000 http://applecrosstech.com/what-is-aave-a-look-at-the-budding-defi-lending-platform/

Aave is a decentralized, open-source, non-custodial liquidity protocol that allows users to earn interest on cryptocurrency deposits, as well as borrow assets through smart contracts.

Aave is interesting (pardon the pun) because interest compounds immediately, rather than monthly or annually. The returns translate into an increase in the number of AAVE tokens held by the lender.

In addition to helping generate income, the protocol also offers flash loans. These are unsecured and unsecured loans where borrowing and repayment occur in the same transaction.

Assets on the Aave as of 03/07/21 (source: aave home page)

The following article explores the history, services, tokenomics, security of Aave, how the protocol works, and what users should beware of when using the Aave platform.

How does Aave work?

The Aave protocol manufactures ERC-20 compliant tokens in a 1: 1 ratio to the assets provided by lenders. These tokens are called aTokens and bear interest by nature. These tokens are struck during deposit and burnt when redeemed.

These aTokens, such as aDai, are indexed at a 1: 1 ratio to the value of the underlying asset, i.e. Dai in the case of aDai.

The Aave lending pool’s loan-borrowing mechanism dictates that lenders will send their tokens to an Ethereum blockchain smart contract in exchange for these aTokens – assets that can be exchanged for the deposited token plus interest.

tokens on Aave

tokens on Aave

Borrowers withdraw funds from the Aave liquidity pool by depositing the required collateral and also receive interest-bearing aTokens to represent the equivalent amount of the underlying asset.

Each liquidity pool, the liquidity market in the protocol where lenders deposit and borrowers withdraw, has a predetermined loan-to-value ratio that determines how much the borrower can withdraw against their collateral. If the borrower’s position falls below the LTV threshold, he is exposed to the risk of liquidation of his assets.

Humble beginnings as ETHLend

Aave was founded in May 2017 by Stani Kulechov as a decentralized peer-to-peer lending platform under the ETHLend name to create a transparent and open infrastructure for decentralized finance. ETHLend raised US $ 16.5 million in its Initial Coin Offering (ICO) on November 25, 2017.

Kulechov, currently also CEO of Aave, successfully led the company into the list of 50 best blockchain projects published by PWC. Aave is headquarters in london and backed by credible investors, such as Three Arrows Capital, Framework companies, ParaFi Capital, and DTC Capital.

ETHLend expanded its offerings and was renamed Aave in September 2018. The Aave protocol was officially launched in January 2020, moving from a Microstaking model to the liquidity pool model.

To add context to this evolution from a Microstaking model to a liquidity pool model, Microstaking was where everyone was using the ETHLend platform. Whether applying for a loan, financing a loan, or creating a loan offer, you had to buy a ticket to get the rights to use the app, and that ticket had to be paid in the native token. of the LEND platform. The ticket was previously a small amount pegged to the USD, and the total number of LENDs needed varied depending on the value of the token.

In the liquidity pool model, lenders deposit funds into liquidity pools. Thus, creating what is called a liquidity market, and borrowers can withdraw funds from liquidity pools by providing collateral. If borrowers become under-secured, they risk liquidation.

Aave raised another US $ 4.5 million an ICO and US $ 3 million by Framework Ventures on July 8 and 15, 2020.

Pronunciation of Aave

Aave is usually pronounced “ah-veh”.

Aave products and services

The Aave protocol is designed to help people lend and borrow cryptocurrency assets. Operating under a liquidity pool model, Aave allows lenders to deposit their digital assets into liquidity pools as part of a smart contract on the Ethereum blockchain. In return, they receive aTokens – assets that can be exchanged for the deposited token plus interest.

Aave's functionality

Borrowers can take out a loan by putting their cryptocurrency as collateral. The Aave liquidity protocol, according to the latest figures available, is greater than 4.73 billion US dollars strong.

Flash loans

Aave Flash Loans are a type of unsecured loan option, which is a unique feature even for the DeFi space. The Flash Loan product is primarily used by speculators looking to take advantage of early arbitrage opportunities.

Borrowers can instantly borrow cryptocurrency within seconds; they must return the borrowed amount to the pool in a transaction block. If they don’t return the borrowed amount in the same transaction block, the entire transaction reverses and rolls back all actions taken up to that point.

Flash loans encourage a wide range of investment strategies that are usually not possible in such a short period of time. If used correctly, a user could benefit from arbitrage, collateral swapping, or reverse charge.

Rate change

Aave allows borrowers to switch between fixed and floating rates, which is a fairly unique feature of DeFi. The interest rates of any DeFi lending and borrowing protocol are generally volatile, and this feature offers an alternative by providing a path of fixed stability.

For example, if you borrow money from Aave and expect interest rates to rise, you can upgrade your loan to a fixed rate to lock in your borrowing costs for the future. On the other hand, if you anticipate a drop in rates, you can go back to free float to reduce your borrowing costs.

Aave Bug Bounty Campaign

Aave offers a bug bounty for savvy cryptocurrency users. By submitting a bug to the Aave protocol, you can earn a reward of up to $ 250,000.

Aave Tokenomics

The maximum supply of AAVE tokens is 16 million and the current supply in circulation is just over 12.4 million AAVE tokens.

Initially, the AAVE had 1.3 billion tokens in circulation. But during a token swap in July 2020, the protocol swapped existing tokens for newly minted AAVE coins at a ratio of 1: 100, resulting in the current supply of 16 million. Three million of these tokens were kept in reserve allocated to the core team development fund.

Aave’s price has been quite volatile, with an all-time high of $ 559.12 on February 10, 2021. The lowest price was $ 25.97 on November 5, 2020.

Aave Security

Aave stores funds on a non-custodial smart contract on the Ethereum blockchain. As a non-custodial project, users retain full control of their portfolios.

Holders of Aave governance tokens can place their tokens in the security module, which acts as a kind of decentralized insurance fund designed to secure the protocol against any shortfall event, such as contractual exploits. In the module, bettors can risk up to 30% of the funds they block in the module and earn a fixed return of 4.66%.

The security module has raised $ 375 million in deposits, arguably the largest decentralized insurance fund of its kind.

AAVE token price

Aave became one of the fastest growing projects in the DeFi craze in the summer of 2020. As of early July 2020, the total value locked in in the protocol was just over US $ 115 million. In less than a year, on February 13, 2021, the protocol passed the milestone US $ 6 billion.

Final thoughts: Why is Aave important?

Aave is a DeFi protocol built on solid fundamentals and has forced other competitors to DeFi space strengthen their value propositions to remain competitive. Features like Flash loans and rate switching provide distinct utility to many of its users. The project currently allows borrowing and lending in 20 cryptocurrencies.

Aave is important because it shows how ripe the DeFi space is for disruption with innovative new features and how much room there is to expand.


Looking to see how Aave stacks up against another fast-growing DeFi project? Check out our guide on Aave vs compound.

]]> Liverpool transfer news: Takumi Minamino joins Southampton on loan http://applecrosstech.com/liverpool-transfer-news-takumi-minamino-joins-southampton-on-loan/ Tue, 09 Mar 2021 10:56:49 +0000 http://applecrosstech.com/liverpool-transfer-news-takumi-minamino-joins-southampton-on-loan/

How did Minamino play at Liverpool?

A year after his £ 7.25million transfer from RB Salzburg, Minamino is still unable to claim Liverpool’s starting XI.

Despite scoring the first goal in the 7-0 defeat at Crystal Palace in December – playing the full 90 minutes – the Japan international has since amassed just six minutes of Premier League football.

What does Southampton hope he brings to St Mary’s?

Ralph Hasenhuttl will want Minamino to add a creative spark to an attacking department that has calmed down in recent weeks.

The Southampton manager will know the Japan international well since working for the Red Bull network, and the hope is that he can fit right in at St Mary’s.

Minamino will be familiar with the 4-2-2-2 system deployed by Hasenhuttl, which should allow for a smooth transition upon his arrival at St Mary’s.

Is he likely to break into the first team at Southampton?

Minamino’s arrival comes just in time for Southampton after compatriot Theo Walcott suffered an injury against Aston Villa on Saturday.

Walcott became a regular part of Hasenhuttl’s starting XI and the Austrian would have liked to add a new corps in the attacking department.

Nathan Redmond and Moussa Djenepo have also been injured at various points this season, so Minamino should imagine his chances of securing a substantial playing time.

Was it a good window for Ralph Hasenhuttl’s team?

While Minamino’s arrival is exciting, Southampton ideally needed to sign a cover at the back.

The club have struggled to add a player in that department but were unable to secure a deal for Manchester United’s Brandon Williams, Tottenham’s Japhet Tanganga and Arsenal’s Ainsley Maitland-Niles.

It was felt to be pointless signing a full-back that wouldn’t improve the squad, and once they exhausted their options, they went for Minamino.

Their squad are thin as paper, so the loan of a player of the same ilk should be seen as a coup.

(Photo: Andrew Powell / Liverpool FC via Getty Images)

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National Guard troops sleep in the Capitol as security increases (photos) http://applecrosstech.com/national-guard-troops-sleep-in-the-capitol-as-security-increases-photos/ Tue, 09 Mar 2021 10:56:49 +0000 http://applecrosstech.com/national-guard-troops-sleep-in-the-capitol-as-security-increases-photos/

Top line

Security measures at the United States Capitol and at state houses across the United States have been tightened in the wake of last week’s riot on the Capitol, as further protests are expected from supporters of President Donald Trump ahead of President-elect Joe Biden’s inauguration in a week’s time.

Highlights

Defense officials plan to send up to 20,000 soldiers of the National Guard in Washington, DC for the inauguration, equivalent to twice the number of combined troops stationed in Iraq and Afghanistan.

Photos show National Guard troops already filling the halls of the Capitol on Wednesday morning ahead of a House vote for impeach Trump for the second time.

Washington State Homes in New York are also stepping up security after the FBI reportedly issued a bulletin warning of plans for armed protesters to demonstrate and “storm” government offices in all 50 states if Trump is removed from office or on the day of Biden’s inauguration, ABC News first reported.

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Shareholders reject appointment of CEO of Dhanlaxmi Bank http://applecrosstech.com/shareholders-reject-appointment-of-ceo-of-dhanlaxmi-bank/ Tue, 09 Mar 2021 10:56:48 +0000 http://applecrosstech.com/shareholders-reject-appointment-of-ceo-of-dhanlaxmi-bank/

MUMBAI: Shareholders of Dhanlaxmi Bank on Wednesday voted against the appointment of managing director and chief executive Sunil Gurbaxani, the private sector lender said in a stock market file.

This follows the vote of the shareholders of Lakshmi Vilas Bank against the appointment of seven directors, including that of S. Sundar as managing director and chief executive officer of the bank.

Gurbaxani has been appointed Managing Director and Managing Director of Dhanlaxmi Bank for a period of three years, effective February 27, and has over three decades of banking experience with State Bank of Bikaner & Jaipur (SBBJ) and Axis Bank.

The vote took place at the bank’s annual general meeting (AGM) on Wednesday, with just 9.5% of the vote in favor of his appointment. Shareholders, however, approved the appointment of all other directors by an overwhelming majority.

Dhanlaxmi Bank reported a net profit of 6.09 crore in the June quarter, down from 19.84 crore over the period of last year. The lender’s gross bad debt ratio stood at 6.89%, while the net non-performing assets ratio was 2.18% as of June 30. The bank’s capital adequacy ratio was also above the regulatory requirement, at 13.94%.

On September 28, the Reserve Bank of India (RBI) appointed DK Kashyap, managing director of the central bank office in Bangalore, as additional director of the bank’s board of directors for a period of two years. This follows several exits from Dhanlaxmi Bank in recent months. Sanjeev Krishnan, part-time chairman and independent director, resigned his post in June, with eight months remaining in his term.

The bank said Krishnan resigned for personal reasons. He was appointed to the bank’s board in February 2018. Krishnan told Mint the RBI appointed him to perform a bank turnaround and he resigned after the bank made a profit. 65.78 crore in FY20.

Other directors like KN Murali and G Venkatanarayanan also resigned from the board in June. The bank then appointed G. Subramonia Iyer, Dr. (Capt.) Suseela Menon, G. Rajagopalan Nair and P. K Vijayakumar and all these appointments were ratified by the shareholders.

Foreign portfolio investors hold 11.44% of the bank’s capital, while individuals whose share capital exceeds 2,000,000 hold 43.82% of its shares.

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County Commissioners Approve First HELP Small Business Loans http://applecrosstech.com/county-commissioners-approve-first-help-small-business-loans/ Tue, 09 Mar 2021 10:56:48 +0000 http://applecrosstech.com/county-commissioners-approve-first-help-small-business-loans/

County Commissioners Approve First HELP Small Business Loans

MOUNT HOLLY – The Burlington County Council of Commissioners has approved the first four zero-interest loans to local businesses affected by the ongoing coronavirus pandemic.

Riverton Health and Fitness Center’s membership was reduced to half of its pre-COVID-19 totals.

Likewise, Team Builders Plus, a Marlton-based company specializing in corporate training and executive coaching, suffered substantial losses due to cancellations and reductions in sales due to the pandemic, and law firms of Stephanie Shreter, a small law firm in Mount Holly, were forced to lay off staff.

The fourth company, Auricle Hearing Aid Center in Cinnaminson, lacked funds to cover expenses such as rent, repair of equipment and advertising.

Things are starting to turn around for the four companies after a difficult 2020, but they have applied for financial support from the county to help them grow again.

All four have been approved by the commissioners to receive interest-free loans of $ 50,000 under the county’s emergency health loan program, also known as AID.

“From the very beginning of the pandemic, the council has made it their mission to provide as much assistance as possible to our residents and small businesses to help them navigate this unprecedented crisis,” said Chief Commissioner Felicia Hopson , council liaison with the bridge. Commission and Ministry of Economic Development. “We promised to make HELP available and are now proud to offer it. Providing zero interest loans will allow these businesses to recover and continue to provide services to our residents. “

HELP loans were created as part of the county’s response to the ongoing health emergency and the economic fallout caused by the pandemic.

A total of $ 660,000 in federal funding for the CARES Act has been secured by the Burlington County Bridge Commission Economic Development Office for loans, which are available to Burlington County businesses facing the challenges of the pandemic.

The Bridge Commission is also responsible for administering the program.

Loans are capped at $ 50,000 and can be used for business-related purchases, payroll, or other expenses or improvements. There are no closing costs, but the jobs must be kept for the life of the loan.

The maximum repayment period is ten years and borrowers must have sufficient collateral in commercial or personal real estate to secure the loans.

The four companies approved for loans Wednesday have been operating in Burlington County for 124 years and plan to use the funding for a variety of purposes, including rehire staff to pre-COVID levels and to help fund other expenses, such as than equipment repair. , maintenance and advertising.

“Small businesses are the backbone of the economy of our county and the state as a whole and many of them have suffered revenue losses related to the pandemic,” Hopson said. “By providing zero-interest loans, we are giving them a lifeline to help them get through these tough times and bounce back to better days. The fact that two of these companies intend to rehire workers they were forced to lay off earlier is incredibly encouraging. “

The loan money is still available. Companies interested in applying can find more information at http://www.bcbridges.org/covid19-resources/

In addition to voting on Wednesday to approve small business loans, Hopson announced the formation of a new partnership between county commissioners, the county economic development office and the Burlington County Regional Chamber of Commerce to create a hub Burlington County Business Center.

Through this partnership, the county and chamber plan to hold monthly seminars for existing small business operators and those interested in starting businesses in the county. The hub will provide a one-stop-shop for businesses to get information on regulations and requirements, available help and other programs and promotions, such as the county’s relaunched Shop Burlington County First initiative.

“Whether you are already established, a new business, or an entrepreneur looking to start their own business, we want to help businesses across the county have all the information they need to be successful,” Hopson said. “We are delighted to partner with the Chamber and look forward to launching this initiative.

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A welcome relief? Mitigate double taxation of beneficiaries – Newsletters http://applecrosstech.com/a-welcome-relief-mitigate-double-taxation-of-beneficiaries-newsletters/ Tue, 09 Mar 2021 10:56:48 +0000 http://applecrosstech.com/a-welcome-relief-mitigate-double-taxation-of-beneficiaries-newsletters/

introduction
Double Taxation and U.S. National Trusts
Manage exposure to double taxation
Comment

introduction

American citizens(1) who are UK residents and beneficiaries of US trusts may be taxed twice on the trust’s income or capital gains due to the overlap of UK and US taxation. The UK-US Double Taxation Convention (the Convention) may not serve as a desired panacea when there is a discrepancy in both the timing of tax obligations and the identity of the taxpayer under the laws. national laws of each jurisdiction. This potential double taxation can be an unfair cost to the use of such trusts for the benefit of transatlantic family members. However, as discussed below, there are options to mitigate this exposure so that UK residents can benefit from US trusts without facing cross-border double taxation.

Double Taxation and U.S. National Trusts

As noted above, a mismatch in the timing of tax payments and the identity of the taxpayer may affect the taxpayer’s ability to claim treaty relief and may result in double taxation. The table below shows the persons taxable in each jurisdiction on income and gains generated by domestic US trusts that are not UK residents.

U.S. National Trust Type

Taxpayer in the United States

UK taxpayer

Confidence of the grantor

Grantors are taxable on the income and gains of the trust as if they owned the assets of the trust

Beneficiaries(2) are subject to UK tax only on receipt of payments or benefits from the trust

Non-granting trust (NGT)

The trustees are taxable on the income and gains of the trust as they arise, unless the net distributable income
(DNI) is distributed to a beneficiary (where the responsibility lies with the beneficiary)

As with transferor trusts, a UK tax liability is only due upon receipt of payments or benefits from the trust.

In general, there is no time limit for claiming a credit for any US tax payable on UK tax when the US has primary taxing rights. On the other hand, if these rights belong to the United Kingdom, there are time limits for the United States to claim a credit for UK tax on US tax payable. If the “paid” basis for claiming foreign tax credits applies, UK tax must be paid either in the calendar year in which the income or gain is generated or, with a schedule additional, before the end of the following year to claim a foreign credit US tax credit payable on that income or gain. In the case of transferor trusts, to the extent that a transferor (in the United States) and a beneficiary (in the United Kingdom) are taxable on the same income or gain, the “exchange of notes” of the treaty considers the tax obligation of the beneficiary as well as that of the settlor. In this way, the convention alleviates the taxpayer’s mismatch in identity, although when determining the grantor’s U.S. tax, it may be necessary to take into account the source of the income and gains and the timing of the payments. distributions.

Manage exposure to double taxation

A US citizen residing in the UK could be taxed twice if he is taxed on the tax base and receives the distribution, or if he is a remittance-based taxpayer and the distribution is paid in the UK- United, after the end of the calendar year following that in which the income or gain arose.

Below are some options for handling such exposure.

Trustees lend to beneficiaries
Loans to UK resident beneficiaries could be made interest free and repayable on demand. The beneficiary would be considered to receive a taxable benefit to the extent that the interest paid (if any) was lower than the interest at the official rate of Her Majesty’s Revenue and Customs (HMRC) (2.25% as of April 6, 2020).(3) For an additional rate taxpayer, the maximum effective rate of income tax on the benefit of not having to pay interest on the outstanding loan is currently 1.0125% of the loan value per year. .

Give UK beneficiaries the right to US trust income
If the net trust income is distributed regularly (e.g. quarterly) to beneficiaries who are US citizens residing in the UK, any UK income tax paid on the income could be claimed as a tax credit a foreigner in the United States, provided that the UK tax has been paid either in the calendar year in which the income was generated or at the end of the following year.(4)

Using Capital Payments to Match Capital Gains from a U.S. Trust
Managing the risk of double taxation of a UK resident beneficiary on the capital gains of a US trust is more difficult, in large part due to the complex rules that apply to UK taxation of income and earnings from non-UK resident trusts. If the trustees can include the gains in the DNI of a trust for US tax purposes, consideration could be given to making “capital payments” (i.e. distributions and other benefits that are not are not taxable in the UK) to the beneficiary in the same year the gains are realized by the US trust. This should align the timing of tax liability in the two jurisdictions, which would make it possible to seek relief from double taxation. However, from the UK perspective, this option is only effective if the US trust does not have ‘relevant income’ (which includes offshore income gains resulting from the disposal of non-UK collective investments. without UK reporting status) because the benefits are taxable by reference to the relevant income of the trust in priority to its realized gains.

However, making annual distributions of a trust’s earnings reduces its effectiveness as a vehicle for a family’s succession plan by withdrawing funds from a trust that may fall outside the scope of Kingdom inheritance tax. -United.

Comment

The potential liability of a UK resident beneficiary for double taxation can be managed as follows:

  • For short-term financing needs, the beneficiary could borrow from the US trust on terms without interest and repayable on demand.
  • The trustees could give the beneficiary a right to the net income of the US trust to facilitate the application for tax credits in the jurisdiction that does not have primary taxing rights.
  • Capital payments equal to the gains of the trust realized in a given year could be made to the beneficiary in the same year, as long as the trust has not accumulated relevant income and the gains can be included in the DNI of the trust for US tax purposes.

Whichever method is adopted, it is important to monitor the timing of tax payments in both jurisdictions and the selection of suitable investments (e.g. US mutual funds without UK reporting status are not suitable).(5)

For more information on this topic, please contact George mitchell to Forsters LLP by phone (+44 20 7863 8333) or email (george.mitchell@forsters.co.uk). The Forsters LLP website can be accessed at www.forsters.co.uk.

End Notes

(1) For simplicity, this article refers to the position of US citizens, but green card holders would generally be in the same position.

(2) A UK resident settlor is also only taxed on receipt of a benefit provided the trust is a protected settlement (which is beyond the scope of this article).

(3) This assumes that the qualification of the payment as a loan is respected by HMRC. This treatment could be challenged – for example, if the beneficiary did not intend to repay the loan, the amount borrowed could also be subject to UK tax.

(4) In theory, difficulties can arise if a person is considered to be taxed on income from a different source in each jurisdiction; a life tenant may be considered as having full rights to the net income of the trust or as having only the right to hold the trustees to account for the net income. In practice, where the United States has primary taxing rights, HMRC will grant a tax credit to a beneficiary even if the source of income is mismatched.

(5) In the context of managing a beneficiary’s exposure to double taxation, this article refers to the English qualified author’s understanding of certain US tax rules.

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Wackenhut family sells historic Palm Beach estate http://applecrosstech.com/wackenhut-family-sells-historic-palm-beach-estate/ Tue, 09 Mar 2021 10:56:48 +0000 http://applecrosstech.com/wackenhut-family-sells-historic-palm-beach-estate/

Rick and Marie Wackenhut with 930 South Ocean Boulevard in Palm Beach (Google Maps, Nantucket Statue Fund)

Rick and Marie Wackenhut sold their historic Palm Beach home for $ 17.9 million.

Records show that 1111 Partners LLC, led by Rick Wackenhut, heir to security firm founder George Wackenhut, sold the five-bedroom, 6,525 square foot home at 930 South Ocean Boulevard to M&M Palm Beach Property Investors LLC.

The buyer, led by attorney Ronald Kochman, financed the purchase with a $ 14 million loan from Iberiabank, records show.

The property is a Palm Beach landmark that was designed by architect Maurice Fatio and restored by vendors, according to the listing. It has a main house, a guest house, a private courtyard and a swimming pool. The two-story house was built in 1927 and is located across the street from the beach.

Lawrence Moens of Lawrence A. Moens Associates had the list.

The property had previously been sold in 2011 for $ 11.5 million, according to records.

Rick Wackenhut was formerly CEO of the security services company. George Wackenhut sold his business in 2002 for $ 570 million. He died in Vero Beach in 2004.

Rick’s sister, Janis Wackenhut, recently paid $ 15 million for a condo on the exclusive Fisher Island in Miami Beach. https://therealdeal.com/miami/2020/08/07/wackenhut-scion-pays-15m-for-fisher-island-penthouse/

Luxury home sales in palm beach and Miami Beach have increased throughout the pandemic.

Private equity titan Scott Shleifer paid off last month over $ 120 million, a record, for a beachfront mansion in Palm Beach.

Former President Donald Trump recently listed his beachfront mansion across from his Mar-a-Lago resort for $ 49 million. Moens is the listing broker.

]]> Wells Fargo has stopped taking new student loan applications http://applecrosstech.com/wells-fargo-has-stopped-taking-new-student-loan-applications/ Tue, 09 Mar 2021 10:56:47 +0000 http://applecrosstech.com/wells-fargo-has-stopped-taking-new-student-loan-applications/

As students come to terms with a radically different learning environment, some may also need to struggle with a smaller list of private student loan lenders from which to borrow. Wells Fargo, one of the largest private student loan lenders, has cut new loan applicants. Instead, “as of July 1, 2020, only clients with an outstanding balance on a Wells Fargo private student loan are eligible to be borrowers on a new private student loan for the 2020-2021 academic year,” website by Wells Fargo States. “Wells Fargo has decided to restrict its student loan target,” mentionned Manuel Venegas, spokesperson for Wells. Students who do not have an outstanding loan with Wells Fargo are encouraged to contact their school’s financial aid office to consider other options. based on a frequently asked questions page on the lender’s website.

Private student loan market

As of March 31, 2020, 92% of student loans belonged to the Department of Education (DOE). This means that $ 1.54 trillion of the $ 1.67 trillion in outstanding student debt belonged to the DOE, according to at MeasureOne. Private student loans represent only eight percent, or $ 131.8 billion, of the student loan market.

Private student loans declined immediately after the Great Recession as banks tightened underwriting (unlike federal loans, private student lenders typically perform credit checks on potential borrowers). Competition from federal loans too increases that Congress allowed graduate students to borrow unlimited amounts in 2006; and that restrictions on lending to parents were relaxed. However, more recently the private student debt market is booming and the amount of private student loans has increased. grown up 71% in the last decade.

Federal loans are generally preferable for most students because they don’t need a credit history or co-signer and offer post-graduation benefits such as income-based repayment and forgiveness options. However, private student loans can be attractive to some students, especially those with very high credit scores who may get a lower interest rate on their loans.

Wells Fargo was one of the largest private lenders of student loans

Wells Fargo was a key player in the private student loan market. According to the Student Borrower Protection Center, it had an 8% market share, with $ 10.6 billion in outstanding private student loan debt.

With potential disruptions to the 2020-2021 academic calendar and an uncertain economic recovery, Wells Fargo may try to reduce its exposure to potentially higher defaults. Like Bloomberg highlighted, “already, more than 40 million student loan accounts were in arrears as of mid-June.”

MORE FORBESNew graduate students could save over $ 20,000 on federal student loan repayment

Conclusion:

While many other options remain, the loss of a leading player in the private student loan market will not be good for the competition, with students potentially facing higher rates. Fortunately, with the Federal Reserve lowering benchmark interest rates to near zero, federal student loans for the next 2020-2021 academic year have dropped significantly. This is yet another reason why students should prioritize federal loans over private loans.

Other related reading:

These 10 states suspend the payments of millions of private borrowers on student loans

New graduate students could save over $ 20,000 on federal student loan repayment

Proposal: $ 1,200 CARES Act stimulus checks for 6.8 million students

Elizabeth Warren and Sherrod Brown Unveil Broad 6-Fold Consumer Protection Proposal

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Credit Rating Mismatch in Secured Loan Obligations http://applecrosstech.com/credit-rating-mismatch-in-secured-loan-obligations/ Tue, 09 Mar 2021 10:56:47 +0000 http://applecrosstech.com/credit-rating-mismatch-in-secured-loan-obligations/

As the U.S. economy continues to struggle, researchers discovered a disturbing gap between credit agency ratings and risk profile of guaranteed loan obligations.

Even more disturbing is why this may sound familiar. “During the 2007-2008 financial crisis, rating agencies were slow to downgrade structured finance products, including guaranteed loan bonds,” said Visiting Assistant Professor at MIT Sloan. “And it looks like we can repeat history during the current COVID-19 crisis. “

Secured Loan Bonds are risky, sub-investment grade corporate loans into safer securities, called tranches, which are then purchased by investors.

According to a new study co-authored by Nickerson, Between March and August 2020, the Standard & Poor’s and Moody’s rating agencies downgraded around 25% of the collateral feeding the CLOs, but the total value of the CLO tranche downgrades was only about 2% %.

This gap suggests that a conflict of interest could be at stake – as was the case during the financial crisis when rating agencies were criticized.

As part of Standard & Poor’s settlement with the Ministry of Justice in 2015, S&P admitted that it did not want to downgrade a company’s underperforming assets because it feared it would hurt its own business. The reason? Companies pay rating agencies to rate their loans; if they don’t like the rating they get from one agency, they can go to another.

“This fear of losing customers is definitely a potential reason the wafers weren’t downgraded,” said Nickerson, co-author of the research with John M. Griffin of the University of Texas at Austin. “I think what we find is consistent with this potential conflict of interest.”

COVID-19 – a black swan event

CLOs are made up of business loans that are below the investment grade, but agencies will give them an AAA rating because they are very diverse, Nickerson said. “We assume that if something is default [in a CLO], it has relatively little correlation with the performance of other companies in the CLO at the same time.

Or at least that was the assumption until COVID-19. As the effects of the pandemic-related closures have been felt this year, bankruptcies have started to occur in several sectors, from department stores to car rental companies.

“If there is to be a time when these assumptions go away – that two companies in unrelated areas wouldn’t default at the same time – COVID-19 would it be,” Nickerson said. “If there is a time when these agreements should fail, it would be during a “black swan” event. “

And yet, rating agencies were not downgrading CLO tranches at a rate commensurate with the financial devastation companies were facing.

To investigate, Nickerson and Griffin collected data on tranche rating stocks, collateral pricing information, and performance metrics, among other factors. They then built a sample of data on CLO collateral holdings between January and June 2020 and developed algorithms to test their predictions.

Their results showed that as the probability of default increased, the ratings of the tranches should have been lowered accordingly to reflect the fact that the underlying pool became riskier. Since downgrades did not take place, investors were investing their money in riskier investments than they appeared.

“If the credit scores are wrong, investors will not only lose confidence in the rating agencies, but they could lose a lot of money as well,” Nickerson said.

Researchers have identified two possible explanations for the disconnection of notes:

Qualitative factors play a role

Nickerson noted that some rating agencies may incorporate non-model factors, or qualitative factors, into their assessments, for example taking into account the past performance of collateral managers. If someone running a CLO has more experience, rating agencies might be more comfortable sticking with a higher rating.

Citing previous research he conducted, Nickerson said that rating agencies turned away from their models before and during the financial crisis and gave more weight to those non-model factors that would allow them to justify a rating. AAA.

Normally, rating agencies publish documentation describing their modeling approach and how they arrived at their ratings. Since factors unrelated to the model are not disclosed to the public in advance, they can easily contribute to opacity and quickly create problems, Nickerson said.

Credit rating agency Kroll Bond, for example, recently said it would pay $ 2.01 million, mostly in fines, to settle U.S. Securities and Exchange Commission civil charges that were failing in its reporting practices. rating.analytical method. “

“I think when you see for example Moody’s say, ‘This is the expected effect on the tranches’, and the downgrade of the tranches doesn’t correspond to that, it suggests that the factors unrelated to the model are taking on a little more weight. right now, ”Nickerson said.

CLO “showcase”

When building a CLO, some portfolio managers choose loans that seem safer from a rating agency’s perspective – and therefore would get a more positive rating, Nickerson said. An example: choose a loan with a maturity of two years against four. In this case, the risk hasn’t changed, but the loan pool is dressed to look more secure, Nickerson said.

“When COVID-19 hit, you actually saw managers start trading these shorter-term loans which, from a modeling perspective, would be given a lower risk weight for a lower probability of default. “said Nickerson. “They are taking actions that will reduce risk through the lens of this model without necessarily reducing the overall risk from an economic perspective. It’s facade in a way.

Too easy to bet the wrong way

CLOs are “really complex products,” Nickerson said, which means it’s important for rating agencies to be clear about their guidelines for how they assign their ratings.

Thinking back to what happened during the financial crisis, “a lot of people were betting the wrong way on these things,” Nickerson said. “They didn’t really understand the risks involved. From this point of view, given the complexity of a CLO, I think investors tend to rely on ratings from credit rating agencies a lot more than they perhaps would when doing so. assessment of an individual loan.

Rating agencies typically have a “regulatory seal of approval” from the government and the SEC, Nickerson said, noting serious consequences if rating agencies deviate from their methodologies without disclosing them. If credit ratings are incorrect, investors will not simply lose faith in rating agencies; they will probably lose their money too.

Nickerson encourages investors to do more due diligence and look beyond ratings before investing. Likewise, he hopes policymakers take note of the disconnect between risk and ratings, as it affects investors through structured investments and pension schemes.

“We do not have access to data that a government organization or oversight committee might have access to, just to verify that it is [the ratings agencies] follow the statements they have made and disclosed to the public, ”Nickerson said. “This is something that policymakers could dig into for more detail if they wanted to.”

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