Knowledge plus series i 231113

FromResearch Desk

VALUE PLUS - The Family Office

KNOWLEDGE PLUSFor Wealth

Plus+

23rd November 2013

Hot Topic Of The Week

Trust – Effective Vehicle to Transfer the Wealth

Knowledge Plus for Wealth +

Last week at the Financial Markets!!!

• SENSEX was down by 182.03 points (-0.89%) and closed to 20217 at end of the week.

• (FIIs) remained net buyers in equity with net inflow of Rs. 3565.10 and net sellers in debt segment with net outflow of Rs. 819.40 crore.

News Impact

• Government approved 20 FDI proposals worth Rs 916 Cr.

• Foreign inflow will increase.• Higher inflow will reduce rupee

volatility.• Rupee will appreciate.

• Government to deregulate diesel prices in next six months with gradual increase in prices.

• Inflation will increase.• Govt. subsidy burden will be reduced.• Diesel demand may reduce.• Negative for Auto Sector and positive

for Oil Upstream companies.


Price Performance of Different Asset Class

LME Copper $/MT

WTI Crude $/bbl

Dow Jones EURUSD USDINR Sensex Gold (Spot) Silver $/t oz (Spot)

-5.00%

-4.00%

-3.00%

-2.00%

-1.00%

0.00%

1.00%

2.00% 1.21% 1.07%

0.65% 0.46%-0.40%

-0.89% -3.32% -4.00%


Last week at the Financial Markets!!!

Choppy movements were seen in various asset

classes.

Next Week in the Financial Markets..?

• Expiry of Derivative Contracts on November 28.


Hot Topic Of The Week

Trust – Effective Vehicle to Transfer the Wealth


• As everyone, you may also want to make sure that your hard-earned wealth lasts throughout your lifetime and is transferred smoothly to the next generation.

• The purpose of Wealth Distribution may vary from receiving lasting stream of income or gifting/transferring assets to loved ones, to leaving behind a philanthropic legacy and also in legacy planning.

• It includes activities like forming a trust, creating a succession plan, drafting a will and philanthropy.

Introduction


• Through a private trust, assets or wealth is transferred by settlor and held by trustee for the benefit of a third party i.e. beneficiaries, under the Indian Trusts Act, 1982.

• There are three parties involved in Trusts namely Settlor, Trustee and Beneficiary.

• It is an effective vehicle for succession planning and estate planning.

• It is a structure that provides effective and hassle free wealth management, asset protection and tax efficiency.

Trust


Types of Trust• Revocable Trust:

– It does not protect assets as these can be withdrawn from the Trust.

– In this case, assets are not considered given away to Trusts and thus taxed at the hands of the settlor.

– The settlor can also be the beneficiary.

• Irrevocable Non-Discretionary– Settlor has complete control of trust norms. So, he decides

which beneficiary receives which assets and in what proportion.– If the settlor is the primary beneficiary, he is taxed at marginal

slab rate.


Types of Trust

• Irrevocable Discretionary– In this case, settlor only decides the beneficiaries and does not

have complete control over Trust.– Trustees decides which beneficiary receives which assets and in

what proportion.– Income tax is applied to Trust level. – The concept of Dividend Distribution Tax and Minimum

alternate tax applicable to company is not applicable to a Trust. – Beneficiaries can save on income tax from the assets till the time

they don't know how much they would receive.


THANK YOUResearch Desk

@VALUE PLUS - The Family Office

Office: (0265 -2324600,6629800) Email: [email protected] Website: www.valueplusinv.com


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Knowledge plus series i 231113