bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

There are three principal strategies that can be adopted to help minimise estate duty.

 The first is to physically relocate assets outside Hong Kong. This would include moving all items that can be transferred just by physical relocation such as jewellery, antiques etc outside Hong Kong.

 Bank accounts would have to be closed and reopened elsewhere - preferably in a jurisdiction where there is no estate duty.

 The second strategy would be to transfer any assets into a suitable offshore discretionary trust, where the settler or creator of the trust is not actually a beneficiary of the trust. It is important that the person who is transferring the assets to the trust does not retain any control over them once they have been handed over. It is, therefore, crucial that the trust is properly structured at the outset and is properly administered thereafter.

 Setting up a discretionary trust is a typical strategy for owning Hong Kong property and Hong Kong business that cannot be transferred simply by relocating its physical presence.

 Another strategy that is a little more unusual would be to transfer items such as land and buildings and business into a suitable insurance vehicle instead of a trust vehicle.

 An insurance company is not a controlled company for the purposes of Section 35 of the Estate Duty Ordinance.

 This means that the Inland Revenue Department cannot attack the transfer of land or shares into an insurance policy, although it could attack the transfer of Hong Kong property into an offshore company which is owned of the property by the previous owner or his associate.

These tax tips were provided by Debbie Annells, a director of tax consultants Horwath Tax, a division of Horwath International FACTS AND FIGURES Estate duty applies to any person who has more than $7.5 million in Hong Kong assets at the date of death. If the dutiable estate of a person is less than $7.5 million, there is no duty payable.

Estate duty is only charged on property located in Hong Kong at the time of death.

For estates valued between $7.5 million and $9 million the charge is 5 per cent. Between $9 million and $10.5 million, this rises to 10 per cent. However, if the value of a person's Hong Kong estate exceeds $10.5 million this will be subject to duty at the rate of 15 per cent on the entire value of the estate - there is no sliding scale.



Estate duty can be avoided