Legislation that seeks to abolish estate tax in Hong Kong was gazetted last Friday.
According to a government spokesman, the move is seen as vital in attracting and retaining foreign investment in Hong Kong, and is supported by the majority of respondents to a public consultation on the proposals, carried out last year.
"In recent years, global financial services have experienced phenomenal growth. The financial markets in the Asia-Pacific region have also quickened the pace of their development. Hong Kong is looking at unprecedented opportunities in this sector, but at the same time faces increasing competition," the spokesman observed, continuing:
"A number of countries in the region, including India, Malaysia, New Zealand and Australia, have abolished estate duty over the past 20 years. Hong Kong must not lose out in this race.
"The abolition will encourage people, including overseas investors, to hold assets in Hong Kong through a Hong Kong corporate vehicle or trust. Those who currently avoid the tax through overseas investments will also be encouraged to transfer their investments back to Hong Kong.
"The further development of the high value-added asset-management industry will foster growth in a number of professional services, and other industries will also benefit, bringing significant economic benefits to the community as a whole.
"Apart from attracting or retaining capital to promote the development of Hong Kong's financial services industry, the proposed abolition of estate duty will also reduce the time taken for obtaining the grant of probate or letters of administration, thereby helping to ease cash-flow problems heirs to an estate currently face, particularly for operators of small and medium enterprises."
It is estimated that the proposal to abolish estate duty will cost the Government annual tax revenues of around $1.5 billion. However, the abolition of estate duty is expected to encourage investments in both financial assets and the property market in Hong Kong, thereby contributing additional revenue from stamp duty and other taxes.
Under the proposal in the Bill, estates of persons who pass away after the commencement of the Revenue (Abolition of Estate Duty) Ordinance 2005 will not be subject to estate duty.
The Bill will be introduced into the Legislative Council on May 11, 2005.
A comprehensive report in our Intelligence Report series giving background tax and residence information on many of the key offshore jurisdictions is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report4.asp
Network Tweets
Network BlogsContent
provided by
|
Archive | Resources | Partners | Site Map | Links | Newsletter Archive | Contact | RSS Feeds | About | Syndication | Advertising & Marketing | Recruitment | Terms & Conditions | Privacy
Copyright © 2012 - All Rights Reserved - Tax-News.com
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment