[Banking and Management] Assess the advantages and limitations of Essay

[Banking and Management] Assess the advantages and limitations of universal banking OR all purpose financial institutions - Essay Example tional economic investments, the Chinese banking sector has undertaken the strategies of integrating investment services, advisory and underwriting service, home finance and asset management under the same umbrella of the commercial services provided the banks. The universal banking service offered by the Chinese state-owned banks has certain advantages as well as the limitations. On one hand, the aspect of universal banking enables the banks to increase their sales revenues and profitability by catering to the investment demands of the worldwide markets apart from the commercial services. The limitations of offering universal banking products and services lay due to the fluctuation of international economic conditions and the fluctuation of interest rates, exchange rate that would increase the risk exposure of the investment services. The concept of universal banking includes a wide range of financial services provided by the banks in order to cater to the regular banking as well as the investment needs of the customers. The aspect of â€Å"all purpose financial institutions† is related to offering comprehensive service to the customers that also help the banks to diversify the risk of their business. The various banking products and solutions that are offered under the system of universal banking includes savings and deposits accounts, loans and credit services, management of assets, investment service, underwriting services, financial analysis, advisory services, processing of payments, etc. However, banks may choose to offer specific products and services in a universal banking system depending on their specializations. The Chinese banks have been recently named by a magazine as the one of the world’s largest and profitable banks in the world (Linda and Julapa, 2000, p.33). However, this does not mean that the Chinese banking sector is more resilient to the complexities of international economies. Although developments in the Chinese banking sector have

Tax-Planning Client Letter on Irrevocable Trusts, Gift Tax, and Estate Essay

Tax-Planning Client Letter on Irrevocable Trusts, Gift Tax, and Estate Tax - Essay Example The first thing you need to know is that irrevocable trusts are treated as independent legal entities that own their assets. It is also important to know that in the course of establishing an irrevocable trust is likely involve unexpected tax consequences. Some of the tax consequences are likely to be unfavorable. Since you would like the income from the trust to be paid to your two grandchildren for 20 years, such payment would be accompanied by income tax. In this regard, you will need to complete Form 1041 and file it to report the trust income. This would be required if the trust earns over $600 in the course of tax year. Nevertheless, the income from the irrevocable trusts would be taxed in the same approach as individuals. You, as the trustee, will also be required to file and deliver copies of Schedule K-1 to each of the two grandchildren, who are the beneficiaries, in their first distribution during the tax year (Clausen, Givner, Kavagh, kaye, & Kinyan, 2014 ). There is also the issue of gift tax. In this regard, the transfer of your assets to the irrevocable trust is accompanied by gift tax liability. The only exclusion is a case of $13,000 per annum on each of the beneficiaries. If the gift exceeds $13,000, it is subjected a maximum tax rate of 35%. In such a case, you would be required to file the gift tax by filing Form 709.This would however be necessary if you owe the gift tax. It is important to note that your grandchildren, as the beneficiaries, will not be liable for the gift tax (Clausen, Givner, Kavagh, kaye, & Kinyan, 2014 ). Another case of possible tax liability is estate tax. Estate tax would be imposed after your death. This will be done on the portion of your estate that surpasses the gift tax exclusions in the same year of your death. Your executor after then would be required to file Form