1- There are ignorant of the law or unscrupulous promoters who recommend wealthy individuals to rely on banking secrecy in order to avoid declaring assets and income to the relevant tax authorities, or to avoid criminal investigations concerning money gained from illegal transactions. They also recommend ways to break the law without being caught. Only very foolish individuals will even try powerful governments. Nobody can break the law and escape the vast power and resources of the wealthiest governments. All assets protection's strategies have to rely upon a legally defensible operation.2- The best way wealthy individuals can protect themselves, as well as their heirs against leonine inheritance taxes, can be by establishing a legally defensible operation in order to "beggar" themselves. Nobody can take the assets away from individuals if they do not own such assets. There is no need to move the assets but, obviously, the title has to. Once the assets' title has been transferred to a legally defensible operation, such assets can not be levied against or seized by creditors, nor tied up in probate court, nor be taxed, because individuals do not own such assets.
3- There are ignorant of the law or unscrupulous promoters who claim they can offer tax advantages by going offshore. Concerning citizens or residents of the wealthiest countries of the world such claim is far from the truth. There are no legitimate tax advantages to citizens or residents of the wealthiest countries of the world using an offshore I.B.C. or trust of any kind, unless investors, rather than by hiding ( everything could be found by powerful governments ), are able to handle legally defensible operations in a more favorable business environment.
4- Governments of countries of the world that charge tax on income obtained overseas by their citizens or residents, violate the principle of territoriality.
5- Investors able to handle legally defensible operations, in a more favorable business environment, may, under an actual protective structure, handle investment funds, manage risks, minimize taxes, own and operate businesses, issue shares, issue bonds, raise capital in other ways, reduce overall reserve and capital requirements, etc. Investors can create complex financial structures whose beneficiaries are protected by a shield, rather than by hiding, by legally protecting themselves.
6- Wealthy individuals are the most important target of litigation and their protective abilities have been eroded, in certain countries, by court decisions and legislation which prevent such individuals from operating in an asset protection sense. They can establish operations in jurisdictions with favorable asset protection laws having in mind several reasons, including but not limited to : a claimant's attorney, who will not be able to accept the case on a contingency fee basis, contemplating an action to "recover" assets from individuals in other jurisdictions knows nothing of such jurisdictions' laws, procedures, costs, currency, etc; well paid, and after a long time of litigation in order to reach the jurisdiction such attorney will likely be faced with an expired statute of limitations; because of such obstacles individuals are not automatic target of litigation.
7- Investors can handle legally defensible operations in a more favorable business environment, including but not limited to no capital tax, no withholding tax on dividends or interest, no tax on transfers, no corporation tax, no exchange controls, no capital gains tax, light regulation and supervision, less stringent reporting requirements, and less stringent trading restrictions. Investors do not have to violate any law, but investors can take the opportunity to start over again.
8- Investors can find countries of the world where governments charge no tax (zero tax) on interests earned, nor on capital gained, nor on income obtained overseas.
9- This Website has welcomed thousands, as well as very interesting questions. The most recurrent is: What is the nature of the strategy, how to put a legally defensible operation on, and how does it work?. The response to such combined question is more than 50 % of our wealth, more than 50 % of our business's core, and the outcome from more than ten years of deep study and research.
10- A legally defensible operation must be properly established and maintained. The operation must have a purpose which can not be perceived as a tax avoidance. The operation must not be a sham. In every case where an asset protection operation is held to be invalid,the most important reason is that such operation is a sham.
11- Wealthy individuals have to be able to understand the difference between actual or potential private claimant, and powerful governments. Nobody can take the assets away from wealthy individuals, if they can not be found by them, can be near from the truth concerning private claimants; but wealthy individuals have to remember that everything can be found by powerful governments. Concerning U.S. citizens or residents, under "Tax Neutral System", various I.R.S. reports are required.
12- Wealthy individuals in countries with weak economies and banking systems may rely upon a legally defensible operation, to protect themselves against the collapse of their domestic currencies and banks, to "outside" the reach of potential or existing exchange control, to restructure ownership of their assets when facing unlimited liabilities in their home jurisdiction, to protect those assets from lawsuits, etc. Asset protection (sometimes also referred to as debtor-creditor law) refers to a set of legal techniques and a body of statutory and common law dealing with protecting assets of individuals and business entities from civil money judgments, creditors such as trusts, partnerships and international entities. Asset protection help minimizes the risk of loss from unexpected hazards of businesses and individuals. This law has shielded and protected many families from business failures and lawsuits. There are many programs available to help an individual or business minimize or avoid tax liability. Asset protection strategies vary depending on factors such as country of residence and citizenship, age, or annual net income. Lawyers are usually involved in the design and management of an asset protection strategy. Strategies of asset protection include, amongst others, insurance, titling, formation of entities, trusts, privacy plans, equity stripping, and family limited partnerships.
Asset. This article is about the business definition.
In business and accounting, assets are everything of value that is owned by a person or company. [1]. The Balance Sheet of a firm records the monetary[1] value of the assets owned by the firm.
The 2 major Asset Classes are Tangible Assets and Intangible Assets. Tangible Assets contain various subclasses, including Financial Assets and Fixed Assets.[2] Financial Assets include such items as Accounts Receivable, Bonds, Stocks and Cash; while Fixed Assets include such items as Buildings and Equipment.[3] Intangible Assets are nonphysical resources and rights that have a value to the firm because they give the firm some kind of advantage in the Market Place. Examples of Intangible Assets are Goodwill, Copyrights, Trademarks, Patents and Computer Programs.[3]
1 Asset characteristics
1.1 Current assets
1.2 Long-term investments
1.3 Fixed assets
1.4 Intangible assets
Asset characteristics
Assets have three essential characteristics:
The probable future benefit involves a capacity, singly or in combination with other assets, in the case of profit oriented enterprises, to contribute directly or indirectly to future net cash flows, and, in the case of not-for-profit organizations, to provide services; The entity can control access to the benefit; The transaction or event giving rise to the entity's right to, or control of, the benefit has already occurred.
It is not necessary, in the financial accounting sense of the term, for control of assets to the benefit to be legally enforceable for a resource to be an asset, provided the entity can control its use by other means.
It is important to understand that in an accounting sense an asset is not the same as ownership. In accounting, ownership is described by the term "equity," (see the related term shareholders' equity). Assets are equal to "equity" plus "liabilities."
The accounting equation relates assets, liabilities, and owner's equity:
Assets = Liabilities + Owners' Equity
The accounting equation is the mathematical structure of the balance sheet.
Assets are usually listed on the balance sheet. It has a normal balance, or usual balance, of debit (i.e., asset account amounts appear on the left side of a ledger).
Similarly, in economics an asset is any form in which wealth can be held.
Probably the most accepted accounting definition of asset is the one used by the International Accounting Standards Board [4]. The following is a quotation from the IFRS Framework: "An asset is a resource controlled by the enterprise as a result of past events and from which future economic benefits are expected to flow to the enterprise." [5]
Assets are formally controlled and managed within larger organizations via the use of asset tracking tools. These monitor the purchasing, upgrading, servicing, licensing, disposal etc., of both physical and non-physical assets.
= ways.[] In a company's balance sheet certain divisions are required by generally accepted accounting principles (GAAP), which vary from country to country.
Current assets
Main article: Current asset
Current assets are cash and other assets expected to be converted to cash, sold, or consumed either in a year or in the operating cycle. These assets are continually turned over in the course of a business during normal business activity. There are 5 major items included into current assets:
Cash and cash equivalents — it is the most liquid asset, which includes currency, deposit accounts, and negotiable instruments (e.g., money orders, cheque, bank drafts).
Short-term investments — include securities bought and held for sale in the near future to generate income on short-term price differences (trading securities).
Receivables — usually reported as net of allowance for uncollectable accounts.
Inventory — trading these assets is a normal business of a company. The inventory value reported on the balance sheet is usually the historical cost or fair market value, whichever is lower. This is known as the "lower of cost or market" rule.
Prepaid expenses — these are expenses paid in cash and recorded as assets before they are used or consumed (a common example is insurance). See also adjusting entries.
The phrase net current assets (also called working capital) is often used and refers to the total of current assets less the total of current liabilities.
Long-term investments
Often referred to simply as "investments". Long-term investments are to be held for many years and are not intended to be disposed in the near future. This group usually consists of four types of investments:
Investments in securities, such as bonds, common stock, or long-term notes.
Investments in fixed assets not used in operations (e.g., land held for sale).
Investments in special funds (e.g., sinking funds or pension funds).
Investments in subsidiaries or affiliated companies.
Different forms of insurance may also be treated as long term investments.
Fixed assets
Main article: Fixed asset
Also referred to as PPE (property, plant, and equipment), or tangible assets, these are purchased for continued and long-term use in earning profit in a business. This group includes land, buildings, machinery, furniture, tools, and certain wasting resources e.g., timberland and minerals. They are written off against profits over their anticipated life by charging depreciation expenses (with exception of land). Accumulated depreciation is shown in the face of the balance sheet or in the notes.
These are also called capital assets in management accounting.
Intangible assets
Main article: Intangible asset
Intangible assets lack physical substance and usually are very hard to evaluate. They include patents, copyrights, franchises, goodwill, trademarks, trade names, etc. These assets are (according to US GAAP) amortized to expense over 5 to 40 years with the exception of goodwill. Websites are treated differently in different countries and may fall under either tangible or intangible assets.
Source: Wikipedia