After the success of our article on the Panama Papers (read it here) this week’s What The F**ance article covers some of the terms bandied about in the leak.
Hedge funds are an alternative investment (not one of the three traditional asset types – stocks, bonds or cash) using pooled funds collected from different investors. Hedge funds may be aggressively managed in both domestic and international markets with the goal of generating high returns.
Capital Gains Tax
Capital gains tax is a type of tax levied on capital gains incurred by individuals and corporations. Capital gains are the profits that an investor realise when they sell the capital asset (real estate or investment) for a price that is higher than the purchase price.
A holding company is a parent corporation, limited liability company or limited partnership that owns enough voting stock in another company to control its policies and management. A holding company exists for the sole purpose of controlling another company, rather than for producing its own goods or services. Holding companies can also own property such as real estate, patents, trademarks or stocks. If a business is 100% owned by a holding company, it is called a wholly owned subsidiary.