Top court rejects couple's appeal for tax break on investment losses

PUBLISHED : Wednesday, 23 February, 2011, 12:00am
UPDATED : Wednesday, 23 February, 2011, 12:00am

A couple who lost appeal after appeal over their claims that heavy losses from their securities investment should be tax-deductible saw their latest legal bid thrown out of court yesterday.

Jacky Lee Yee-shing and his wife Yeung Yuk-ching essentially exhausted all legal avenues when the Court of Final Appeal upheld in January 2008 an Inland Revenue decision against their claims. But they changed tack and sought to launch a judicial review against the whole appeal system.

Their application for a judicial review was dismissed in the Court of First Instance yesterday by Mr Justice Johnson Lam Man-hon.

Court records showed that Lee's dealings in securities and futures amounted to more than HK$2.8 billion in 1993-94 and 1997-98. But he incurred substantial losses during the Asian financial crisis that he wanted discounted from his income tax.

The Board of Review under the Inland Revenue Ordinance ruled against him. Its decision was upheld by the Court of First Instance, Court of Appeal and Court of Final Appeal.

The couple then sought to challenge the entire appeal procedure by applying for a judicial review, contending that they were allowed to appeal only on the facts considered by the board. They argued that additional facts about their case ought to be made available in their appeals and that being barred from doing so violated their constitutional right.

They argued the appeal system effectively restricted their right of access to the court, an entitlement that is enshrined in the Basic Law.

In dismissing their application yesterday, Lam said the appeal to the board was conducted in a manner similar to a judicial process, 'with all safeguards to fairness'.

This was considered to be the case even though people could not bring an appeal on the facts under the statutory appeal regime.