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(CHAPTER 111)CONTENTS

(CHAPTER 111)CONTENTS Section 1. Short title 2. Application 3. Interpretation 3A. Exercise of powers and duties 4. Appointment as commissioner for oaths 5. Estate duty 6. What property is deemed to pass on death 7. Dispositions in favour of relatives 7A. Presumption of simultaneous death 8. Exemptions 9. Accretions to gifts inter vivos 10. Exceptions for transactions for money consideration, property situate outside Hong Kong, shares on local registers and certain land in the New Territories 10A. Exception for matrimonial home 11. Aggregation of property 12. Payment of estate duty 13. Value of property; allowance for debts and funeral expenses 14. Recovery of estate duty, etc.

14A. Exemption of executors of small estates 15. Probate not to be issued until estate duty paid 16. Increase of estate duty when delay in lodging affidavit 17. Duty of executor as to unregistered shares 18. Charge of estate duty on property 19. Apportionment of estate duty 20. Remission and refunding of estate duty on certain grounds. Proviso regarding war deaths 21. Remission in case of successive war deaths 22. Appeal to High Court 23. Schedule of property to be annexed to probate 24. Penalties for intermeddling 25. Notification of interest of deceased person in bank or business undertaking 26. Executor's accounts 27. Power to reduce penalty and duty 28. Power to Governor in Council to make rules and prescribe forms, fees and charges 29. Presumption as to shares standing in the name of the deceased 30. Relief in the case of certain settlements 31. Relief in respect of quick succession where property consists of leasehold property or a business 32. Reduction of full amount of duty where the margin above the limit of value is small 33. Relief in the case of certain interests which do not fall into possession 34. Controlled companies 35. Charge on assets of controlled companies 36. Benefits from company to deceased 37. Surrender of benefits 38. Determination of net profits of company 39. Allowances in the valuation of assets 40. Limitation on charge 41. Limitation of exceptions 42. Duty to give information on death 43. Collection and incidence of duty 44. Value of shares and debentures of controlled companies 45. Limitation on dispositions through a controlled company in favour of relatives First Schedule Duty applicable to deaths before 27 February 1931 Second Schedule Duty applicable to deaths on or after 27 February 1931 and before 1 July 1936 Third Schedule Duty applicable to deaths on or after 1 July 1936 and before 1 April 1941 Fourth Schedule Duty applicable to deaths on or after 1 April 1941 and before 1 April 1948 Fifth Schedule Duty applicable to deaths on or after 1 April 1948 and before 1 February 1959 Sixth Schedule Duty applicable to deaths on or after 1 February 1959 and before 1 January 1963 Seventh Schedule Duty applicable to deaths on or after 1 January 1963 and before 1 April 1967 Eighth Schedule Duty applicable to deaths on or after 1 April 1967 and before 1 April 1970 Ninth Schedule Duty applicable to deaths on or after 1 April 1970 and before 1 April 1972 Tenth Schedule Duty applicable to deaths on or after 1 April 1972 and before 1 April 1974 Eleventh Schedule Duty applicable to deaths on or after 1 April 1974 and before the Commencement of the Estate Duty (Amendment) Ordinance 1976 Twelfth Schedule Duty applicable to deaths on or after the Commencement of the Estate Duty (Amendment) Ordinance 1976 and before the commencement of the Estate Duty (Amendment) Ordinance 1977 Thirteenth Schedule Duty applicable to deaths on or after the commencement of the Estate Duty (Amendment) Ordinance 1977 and before the commencement of the Estate Duty (Amendment) Ordinance 1980 Fourteenth Schedule Duty applicable to deaths on or after the commencement of the Estate Duty (Amendment) Ordinance 1980 and before the commencement of the Estate Duty (Amendment) Ordinance 1981 Fifteenth Schedule Duty applicable to deaths on or after the commencement of the Estate Duty (Amendment) Ordinance 1981 and before the commencement of the Estate Duty (Amendment) Ordinance 1982 Sixteenth Schedule Duty applicable to deaths on or after the commencement of the Estate Duty (Amendment) Ordinance 1982 and before the commencement of the Estate Duty (Amendment) Ordinance 1987 Seventeenth Schedule Duty applicable to deaths on or after the commencement of the Estate Duty (Amendment) Ordinance 1987 and before the commencement of the Estate Duty (Amendment) Ordinance 1990 Eighteenth Schedule Duty applicable to deaths on or after the commencement of the Estate Duty (Amendment) Ordinance 1990 and before the commencement of the Estate Duty (Amendment) Ordinance 1993 Nineteenth Schedule Duty applicable to deaths on or after the commencement of the Estate Duty (Amendment) Ordinance 1993 Twentieth Schedule Provisions supplementary to sections 34 to 45 inclusive To amend and consolidate the law relating to estate duty.

[26 February 1932] 1. Short title This Ordinance may be cited as the Estate Duty Ordinance.

2. Application This Ordinance shall apply in the case of every deceased person dying or who shall have died on or after 1 January 1976; and it shall also apply in the case of every deceased person who shall have died before that date if representation to his estate has not been applied for before 2 May 1921.

3. Interpretation (1) In this Ordinance, unless the context otherwise requires- "account" means an account of the particulars and value of the estate of a deceased person in such form as may be prescribed by the Governor in Council, and verified by affidavit; "affidavit for the Commissioner" means an affidavit in such form as may be prescribed by the Governor in Council verifying the particulars and value of the estate of a deceased person; "applicable Schedule" in the case of persons dying before 27 February 1931 means the First Schedule, and in the case of persons dying thereafter but before 1 July 1936 means the Second Schedule, and in the case of persons dying on or after 1 July 1936 but before 1 April 1941 means the Third Schedule, and in the case of persons dying on or after 1 April 1941 but before 1 April 1948, means the Fourth Schedule, and in the case of person dying on or after 1 April 1948 but before 1 February 1959 means the Fifth Schedule, and in the case of persons dying on or after 1 February 1959 but before 1 January 1963 means the Sixth Schedule, and in the case of persons dying on or after 1 January 1963 but before 1 April 1967 means the Seventh Schedule, and in the case of persons dying on or after 1 April 1967 but before 1 April 1970 means the Eighth Schedule, and in the case of persons dying on or after 1 April 1970 but before 1 April 1972 means the Ninth Schedule, and in the case of persons dying on or after 1 April 1972 but before 1 April 1974 means the Tenth Schedule, and in the case of persons dying on or after 1 April 1974 but before the commencement of the Estate Duty (Amendment) Ordinance 1976 means the Eleventh Schedule, and in the case of persons dying on or after the commencement of the Estate Duty (Amendment) Ordinance 1976 but before the commencement of the Estate Duty (Amendment) Ordinance 1977 means the Twelfth Schedule, and in the case of persons dying on or after the commencement of the Estate Duty (Amendment) Ordinance 1977 but before the commencement of the Estate Duty (Amendment) Ordinance 1980 means the Thirteenth Schedule, and in the case of persons dying on or after the commencement of the Estate Duty (Amendment) Ordinance 1980 but before the commencement of the Estate Duty (Amendment) Ordinance 1981 means the Fourteenth Schedule, and in the case of persons dying on or after the commencement of the Estate duty (Amendment) Ordinance 1981 but before the commencement of the Estate Duty (Amendment) Ordinance 1982 means the Fifteenth Schedule, and in the case of persons dying on or after the commencement of the Estate Duty (Amendment) Ordinance 1982 but before the commencement of the Estate Duty (Amendment) Ordinance 1987 means the Sixteenth Schedule, and in the case of persons dying on or after the commencement of the Estate Duty (Amendment) Ordinance 1987 but before the commencement of the Estate Duty (Amendment) Ordinance 1990 (31 of 1990) means the Seventeenth Schedule, and in the case of persons dying on or after the commencement of the Estate Duty (Amendment) Ordinance 1990 (31 of 1990) but before the commencement of the Estate Duty (Amendment) Ordinance 1993 (29 of 1993) means the Eighteenth Schedule, and in the case of persons dying on or after the commencement of the Estate Duty (Amendment) Ordinance 1993 (29 of 1993) means the Nineteenth Schedule; (Amended 47 of 1962 s. 2; 24 of 1967 s. 2; 37 of 1970 s. 2; 27 of 1972 s. 2; 24 of 1974 s. 2; 31 of 1976 s. 2; 31 of 1977 s. 2; 33 of 1980 s. 2; 29 of 1981 s. 2; 28 of 1982 s. 2; 29 of 1987 s. 2; 31 of 1990 s. 2; 29 of 1993 s. 2) "assets" includes goodwill; "associated operations" means any 2 or more operations of any kind being- (a) operations which affect the same property, or one of which effects some property and the other or others of which affect property which represents, whether directly or indirectly, that property or income arising from that property, or any property representing accumulations of any such income; or (b) any 2 operations of which one is effected with reference to the other, or with a view to enabling it to be effected or to facilitating its being effected, and any third operation having a like relation to either of those two, and any fourth operation having a like relation to any of those three, and so on, whether those operations are effected by the same person or by different persons, whether they are connected otherwise than as aforesaid or not, and whether they are contemporaneous or any of them precedes or follows any other; "average rate" means, in relation to a company, a rate per cent per annum, the percentage being ascertained by- (a) computing the aggregate amount of the net profits of the company for the relevant accounting years, a deduction being made, where the company sustained a loss in any of those years, of the amount of the loss; (b) dividing that amount by the number of those years; and (c) comparing the result with the principal value of the assets of the company passing on the death of the deceased by virtue of section 35 after making the allowances to be made under section 39; "Commissioner" means such person as the Governor may appoint as Commissioner for the purpose of this Ordinance; (Amended 21 of 1972 s. 2) "company" includes any body corporate, wheresoever incorporated; "debenture" means, in relation to a company, any obligation of the company in respect of any loan capital issued by the company otherwise than as consideration for a loan made to it in the ordinary course of banking business, or in respect of any debt incurred by the company- (a) for any money borrowed by the company, otherwise than by way of temporary loan made in the ordinary course of a banking business; (b) for any transfer of capital assets made to the company by any person, unless the obligation is one resulting from a dealing with a person who transferred such assets to the company in, and on terms consistent with, the ordinary course of a business carried on by him; (c) without consideration, or for consideration the value of which to the company at the time when the debt was incurred was substantially less than the value at that time of the debt, including any premium thereon; or (d) where the debt was of such a nature that it would in the ordinary course of business and apart from some special arrangement, have carried interest, if the debt did not carry interest or carried interest at a rate which was either unreasonably high or unreasonably low; "disposition" includes any trust, covenant, agreement or arrangement, whether made by a single operation or by associated operations, and also, in relation to shares in or debentures of a company, the extinguishment or any alteration of rights attaching thereto, whether effected by a single operation or by associated operations; "distributed assets" means, in relation to a company, assets of the company to which section 35 (3) applies which were disposed of or distributed by the company as mentioned in that subsection, and "value of the distribution" means, in relation to any distributed assets, the value thereof or, if partial consideration, other than the extinguishment, or an alteration, of rights attaching to shares in or debentures of a company to which that section applies, was given for the distribution in money or money's worth received by the company for its own use and benefit, the value thereof less the value of the consideration given; "dividend" includes a bonus chargeable to tax under the Inland Revenue Ordinance (Cap. 112) and also any bonus which would be so chargeable if it had arisen in or been derived from Hong Kong; (Amended 31 of 1990 s.

10) "estate duty" means duty chargeable under this Ordinance; "executor" means the executor or administrator of a deceased person and includes, as regards any obligation under this Ordinance, any person who takes possession of or intermeddles with the property of a deceased person or any portion thereof; "incumbrance" includes mortgage and terminable charge; "interest in expectancy" includes an estate in remainder or reversion and every future interest whether vested or contingent, but does not include a reversion expectant upon the determination of a lease; "member" means, in relation to a company, a holder in his own right of any share in or debenture of the company, and a person interested in any share in or debenture of the company held, whether by himself or another, otherwise than in the holder's own right; "officer" means, in relation to a company, any person who exercises the functions of a director, manager, secretary or liquidator of the company; "payment" includes a transfer of property and a set-off or release of an obligation, and references to the amount of a payment include, in relation to property transferred or to an obligation set-off or release, references to the value thereof; "periodical payment" means a payment by way of dividend or interest, a payment by way of remuneration not being a single lump sum payment, and any other payment being one of a series of payments, whether inter-connected or not, whether of the same or of varying amounts, and whether payable at regular intervals or otherwise; "property" includes movable and immovable property and the proceeds of sale thereof respectively and any money or investment for the time being representing the proceeds of sale; "property passing on the death" includes property passing either immediately on the death or after any interval, and either certainly or contingently, and either originally or by way of substitutive limitation, and "on the death" includes "at a period ascertainable only by reference to the death"; "power" includes any right or power exercisable by virtue of the holding of shares in or debentures of a company, and any right or power to procure an issue of shares in or debentures of a company; "settlement" means any non-testamentary disposition in writing, whether made voluntarily or upon a good or valuable consideration othe than a bona fide pecuniary consideration, whereby any definite and certain property is settled or agreed to be settled in any manner for any purpose whatsoever; "Unified Exchange" means the stock market established under section 27 of the Stock Exchanges Unification Ordinance (Cap. 361). (Added 31 of 1990 s.

2) [cf. 1894 c. 30 s. 22 (1) U. K; 1940 c. 29 ss. 44, 47 (2) & 59 U. K.; 1944 c. 23 s. 36 U. K.] (2) For the purposes of this Ordinance- (a) a person shall be deemed competent to dispose of property if he has such an estate or interest therein or such general power as would, if he were sui juris, enable him to dispose of the property; and "general power" includes every power or authority enabling the donee or other holder thereof to appoint or dispose of property as he thinks fit, whether exercisable by instrument inter vivos or by will, or both, but exclusive of any power exercisable either in a fiduciary capacity under a disposition not made by himself or as mortgagee; (b) a disposition taking effect out of the interest of the deceased person shall be deemed to have been made by him, whether the concurrence of any other person was or was not required; (c) money which a person has a general power to charge on property shall be deemed to be property of which he has power to dispose; (d) the creation by a person or with his consent of a debt or other right enforceable against him personally or against property of which he was or might become competent to dispose or to charge or burden for his own benefit, shall be deemed to have been a disposition made by that person, and in relation thereto the expression "property" shall include the debt or right created; [cf. 1940 c. 29 s. 45 (1) U. K.] (e) the extinguishment at the expense of the deceased of a debt or other right shall be deemed to have been a disposition made by the deceased in favour of the person for whose benefit the debt or right was extinguished, and in relation thereto the expression "property" shall include the benefit conferred by the extinguishment of the debt or right.

[cf. 1940 c. 29 s. 45 (2) U. K.] [cf. 1894 c. 30 s. 22 (2) U. K.] (3) A person shall be deemed to have made a transfer of property to a company if the property came to be included in the resources of the company by the effect of a disposition made by him or with his consent or of any associated operations of which such a disposition formed one. [cf.

1940 c. 29 s. 58 (2) U. K.] (4) A person shall be deemed to have received or had any payment, income, profit, enjoyment, assets, or interest, the receipt or having whereof by him is relevant for the purposes of this Ordinance, if any of the following conditions have been satisfied in relation thereto, that is to say- (a) if the relevant payment or other matter has been applied in any manner for the benefit of that person, or has been dealt with by that or any other person in any manner calculated to cause it to inure for the benefit of that person at any time, whether in the form of income or not or if any property which was or would be available for the purpose by reason of the effect or successive effects of any one or more of associated operations relating to the relevant payment or other matter has been so applied or dealt with; (b) if any advantages received or to be received at any time by that person have been provided out of that payment or other matter, or out of any such property as aforesaid; (c) if that person became able in any manner to control the application of the relevant payment or other matter, or of any such property as aforesaid, otherwise than in a fiduciary capacity; (d) if the relevant payment or other matter, or any such property as aforesaid, has been applied in any manner so as to increase the value to that person of any property in which he was beneficially interested; or (e) as respects such profits as are mentioned in section 36, if the receipt by, or accrual to, the company of those profits operated in any manner so as to increase the value to that person of any property in which that person was beneficially interested, so however that the amount of the income or profits which that person is to be treated as having received by virtue of this paragraph shall be limited to the amount of the increase in value of the property in question, and references in the Ordinance to the deceased's receiving or having, or being or becoming entitled to receive or have, any such payment or other matter as aforesaid shall be construed accordingly. [cf. 1940 c. 29 s. 58 (3) U. K.] (5) References in this Ordinance- (a) to a disposition's being made by any person, to a power's being exercised or exercisable by any person, or to any other act's being done by any person, include references to its being made, or being exercised or exercisable, or being done, by him and another jointly or by another at his direction or by a company of which he had control, or powers equivalent to control, within the meaning of section 44 (3), whether with or without the consent of any other person having similar powers; references importing an omission on the part of any person in relation to any such matter as aforesaid shall be construed in like manner; and references in relation to any such matter, as aforesaid to its being made, or being exercised or exercisable, or being done or omitted, with the consent of any person include references to its being made, or being exercised or exercisable, being done or omitted, at his request or with or subject to his acquiescence; [cf. 1940 c. 29 s. 58 (4) U. K.; 1954 c. 44 s. 29 (6) U. K.] (b) to a person having any power or control or doing any act in a fiduciary capacity shall be construed as references to his having that power or control or doing that act in a fiduciary capacity imposed on him otherwise than by a disposition made by him and in such a capacity only; [cf. 1940 c. 29 s. 58 (5) U. K.] (c) to an interest ceasing or being limited to cease on a death shall be construed as including references to its being subject to a limitation, in whatsoever form, having the effect of providing in the alternative for its cesser on the death or on the occurrence of some event, or the expiration of some period, before the death; [cf. 1940 c. 29 s. 58 (6) U. K.] (d) to a transfer of property, (except in the definition of "payment" in subsection (1)) shall include a reference to a payment of money, and the expressions "disposition" and "value" respectively, in relation to money shall include payment and amount. [cf. 1952 c. 33 s. 72 (2) U. K.] (Replaced 1 of 1959 s. 2) 3A. Exercise of powers and duties (1) Where under this Ordinance any power is conferred or any duty is imposed on the Commissioner and it is not provided that the power or duty shall be exercised or performed by the Commissioner personally, such power may be exercised or such duty may be performed by a deputy commissioner of estate duty or an assistant commissioner of estate duty.

(2) Except where this Ordinance provides that a power or duty shall be exercised or performed by the Commissioner personally, the Commissioner may, subject to such limitations as he may think fit, authorize in writing any public officer to exercise any power or perform any duty conferred or imposed upon him by this Ordinance. (Added 21 of 1972 s. 3) 4. Appointment as commissioner for oaths (1) The Chief Justice may, by a commission signed by him, appoint the Commissioner or any deputy commissioner to be a commissioner to administer oaths and take declarations and affirmations for the purposes of this Ordinance, and may revoke any such appointment.

(2) Every person so appointed shall be styled a commissioner for oaths and shall have all the powers and discharge all the duties which now belong to the office of a commissioner to administer oaths.

(Added 32 of 1934 s. 2) 5. Estate duty In the case of every deceased person there shall, save as hereinafter expressly provided, be levied and paid upon the principal value, ascertained as hereinafter provided, of all property passing on the death of such person, a duty called estate duty at the graduated rates mentioned in the applicable Schedule: Provided that, where the principal value of an estate comprises a fraction of $100, such fraction shall, for the purpose of determining the amount of estate duty payable, be reckoned as $100; [cf. 1894 c. 30 s. 1 U. K.] Provided also that where an interest in expectancy in any property has, before 27 February 1931, been bona fide sold or mortgaged for full consideration in money or money's worth, then no higher duty on that property shall be payable by the purchaser or mortgagee when the interest falls into possession than is in accordance with the rates mentioned in the First Schedule, and in the case of a mortgage any higher duty payable by the mortgagor shall rank as a charge subsequent to that of the mortgagee. [cf. 1919 c. 32 s. 29 U. K.; 1940 c. 48 s. 17 U. K.] (Amended 47 of 1962 s. 3) 6. What property is deemed to pass on death (1) Property passing on the death of the deceased shall be deemed to include the property following- (a) property of which the deceased was at the time of his death competent to dispose; [cf. 1894 c. 30 s. 2 (1) U. K.] (b) property in which the deceased or any other person had an interest ceasing on the death of the deceased, to the extent to which a benefit accrues or arises by the cesser of such interest, and such property shall be deemed to pass on the death of the deceased notwithstanding that estate or interest has been surrendered, assured, divested or otherwise disposed of, whether for value or not, to or for the benefit of any person entitled to an estate or interest in remainder or reversion in such property, unless that surrender, assurance, divesting or disposition was bona fide made or effected 3 years before the death, or if it was made or effected for such purposes as are recognized by the Commissioner as public or charitable, one year before the death, and bona fide possession and enjoyment of the property was assumed thereunder immediately upon the surrender, assurance, divesting or disposition, and thenceforward retained to the entire exclusion of the person who had the estate or interest limited to cease as aforesaid, and of any benefit to him by contract or otherwise: Provided that where property affected by such a surrender, assurance, divesting or disposition is deemed to be property passing on the death of the deceased by reason only that the property was not, as from the date of the surrender, assurance, divesting or disposition, retained to the entire exclusion of the deceased or a person who had an estate or interest limited to cease on the death of the deceased, and of any benefit to him by contract or otherwise, the property shall not be deemed to pass on the death of the deceased if subsequently, by means of the surrender of the benefit reserved or otherwise, it is enjoyed to the entire exclusion of the deceased or such other person as aforesaid, and of any benefit to him by contract or otherwise, for a period of 3 years immediately preceding the death, or in the case of such purposes as are recognized by the Commissioner as public or charitable, one year immediately preceding the death: Provided also that this paragraph shall not apply to any property the interest in which of the deceased or other person was only an interest as holder of an office or as recipient of the benefits of a charity or as a corporation sloe; (Amended 1 of 1959 s. 3) [cf. 1900 c. 7 s. 11 U. K.; 1910 c. 8 s. 59 U. K.; 1940 c. 29 s. 43 (2) U. K.; 1946 c. 64 s. 47 U.

K.] (C) property taken as a donatio mortis causa made by the deceased or taken under a disposition made by him, purporting to operate as an immediate gift inter vivos, whether by way of transfer, delivery, declaration of trust, or otherwise, which shall not have been bona fide made 3 years before the death or in the case of a gift inter vivos made or effected for such purposes as may be recognized by the Commissioner as public or charitable, one year before the death, or taken under any gift, whenever made, of which property bona fide possession and enjoyment shall not have been assumed by the donee immediately upon the gift and thenceforward retained to the entire exclusion of the donor or of any benefit to him by contract or otherwise: Provided that this paragraph shall not apply to gifts inter vivos which are made in consideration of marriage, or which are proved to the satisfaction of the Commissioner to have been part of the normal expenditure of the deceased, and to have been reasonable having regard to the amount of his income or to the circumstances, or which in the case of any donee do not exceed in the Aggregate $100,000 in value or amount: (Amended 28 of 1979 s. 2; 29 of 1987 s. 3) Provided also that where property taken under a disposition purporting to operate as an immediate gift inter vivos is deemed to be property passing on the death of the deceased by reason only that the property was not, as from the date of the disposition, retained to the entire exclusion of the deceased or a person who had an estate or interest limited to cease on the death of the deceased, and of any benefit to him by contract or otherwise, the property shall not be deemed to pass on the death of the deceased if subsequently, by means of the surrender of the benefit reserved or otherwise, it is enjoyed to the entire exclusion of the deceased or such other person as aforesaid, and of any benefit to him by contract or otherwise, for a period of 3 years immediately preceding the death or in the case of such purposes as are recognized by the Commissioner as public or charitable, one year before the death: (Amended 29 of 1981 s. 3) Provided also that money or money's worth paid or applied by the deceased in or towards satisfaction or discharge of a debt or incumbrance in the case of which section 13 (2) would have had effect on his death if the debt or incumbrance had not been satisfied or discharged, or in reduction of a debt or incumbrance in the case of which that subsection has effect on his death, shall, unless so paid or applied 3 years before the death, be treated as property deemed to be included in the property passing on the death and estate duty shall, notwithstanding anything in section 10 (a), be payable in respect thereof accordingly; (Amended 1 of 1959 s. 3) [cf. 1881 c. 12 s. 38 (2) U. K.; 1889 c. 7 s. 11 U. K.; 1894 c. 30 s. 2 (1) U. K.; 1910 c. 8 s. 59 U. K.; 1939 c. 41 s. 31 (2) U. K.; 1940 c. 29 s. 43 (2) U. K.; 1946 c. 64 s. 47 U. K.] (d) property to which the deceased has been absolutely entitled, and which he has caused to be transferred to or vested in himself and any other person jointly, whether by disposition or otherwise (including also any purchase or investment effected by the deceased either by himself alone, or in concert, or by arrangement with any other person), so that the beneficial interest therein or in some part thereof passes or accrues by survivorship on his death to such other person; [cf. 1881 c. 12 s. 38 (2) U. K.; 1889 c. 7 s. 11 U. K.; 1894 c. 30 s. 2 (1) U. K.] (e) property passing under any past or future settlement made by the deceased by deed or any other instrument not taking effect as a will, whereby an interest in such property or the proceeds of sale thereof, for life or any other period determinable by reference to death is reserved, either expressly or by implication, to the settlor, or whereby the settlor may have reserved to himself the right by the exercise of any power to restore to himself, or to reclaim the absolute interest in such property or the proceeds of sale thereof; [cf. 1881 c. 12 s. 38 (2) U. K.; 1889 c.

7 s. 11 U. K.; 1894 c. 30 s. 2 (1) U. K.] (f) any annuity or other interest purchased or provided by the deceased either by himself alone or in concert or by arrangement with any other person, to the extent of the beneficial interest accruing or arising by survivorship or otherwise on the death of the deceased, except that the foregoing provisions of this paragraph shall have effect in relation to an annuity or other interest purchased or provided wholly or in part by any person who was at any time entitled to, or amongst whose resources there was at any time included, any property derived from the deceased, as if that annuity or other interest had been provided by the deceased, or, if it is proved to the satisfaction of the Commissioner that the application of all the property derived from the deceased would have been insufficient to provide the whole of that annuity or other interest, as if a similar annuity or interest of an amount reduced to an extent proportionate to the insufficiency proved had been provided by the deceased: Provided that for the purpose of determining whether there would have been any such insufficiency as aforesaid, and the extent thereof, there shall be excluded from the property derived from the deceased any part thereof as to which it is proved to the satisfaction of the Commissioner that the disposition of which it, or the property which it represented, was the subject matter was not made with reference to, or with a view to enabling or facilitating, the purchase or provision of the annuity or other interest, or the recoupment in any manner of the cost thereof. [cf. 1894 c. 30 s. 2 (1) U. K.; 1939 c. 41 s. 30 (1) & (3) U. K.] In this paragraph- "property derived from the deceased" shall include any property which was the subject matter of a disposition, made by the deceased, either by himself alone or in concert or by arrangement with any other person, notwithstanding that the disposition was made for full consideration in money or money's worth paid to the deceased for his own use or benefit, or which represented any of the subject matter of such disposition, whether directly or indirectly, and whether by virtue of one or more intermediate dispositions, and whether any such intermediate disposition was or was not for full or partial consideration: Provided that where the first-mentioned disposition was for full consideration in money or money's worth paid to the deceased for his own use or benefit and it is proved to the satisfaction of the Commissioner that the disposition was not part of associated operations which included a disposition by the deceased, either by himself alone or in concert or by arrangement with any other person, otherwise than for full consideration in money or money's worth paid to the deceased for his own use or benefit; or a disposition by any other person operating to reduce the value of the property of the deceased, then, in considering whether estate duty should be charged by virtue of this paragraph, paragraph (c) and section 13 (2), the said first-mentioned disposition shall be left out of the account as if this sub-paragraph did not apply in relation to it; and (Amended L. N.

100 of 1968) [cf. 1943 c. 28 s. 26 U. K.] "subject matter" includes, in relation to any disposition, any annual or periodical payment made or payable under or by virtue of the disposition; (Amended 1 of 1959 s. 3) [cf. 1943 c. 48 s. 26 U. K.] (g) debts and sums of money due and owing from persons in Hong Kong to any deceased person at the time of his death on obligation or other specialty, to the same extent as if they were owing to the deceased upon simple contract, without regard to the place where the obligation or specialty shall be at the time of the death of the deceased; and (Amended 1 of 1959 s. 3; 31 of 1990 s. 10) [cf. 1862 c. 22 s. 39 U. K.] (h) an interest limited to cease on the death which has been disposed of or has determined, whether wholly or partly, whether by surrender, assurance, divesting, forfeiture or in any other manner, except by the expiration of a fixed period at the expiration of which the interest was limited to cease, and whether for value or not, after becoming an interest in possession and the disposition or determination, or any of them if there are more than one, is not excepted by the proviso hereto, then- (i) if, had there been no disposition or determination as aforesaid of that interest and no disposition of any interest expectant upon or subject to that interest, the property in which the interest subsisted would have passed on the death under section 5, that property shall be deemed by virtue of this paragraph to be included as to the whole thereof in the property passing on the death; or (ii) if, had there been no disposition or determination as aforesaid of that interest and no disposition of any interest expectant upon or subject to that interest, the property in which the interest subsisted would have been deemed by virtue of paragraph (b) to be included to a particular extent in the property passing on the death, then, the property in which the interest subsisted shall be deemed by virtue of this paragraph to be included to that extent in the property passing on the death: Provided that where a disposition or determination of an interest limited to cease on the death was bona fide effected or suffered 3 years before the death, or, if it was effected or suffered for such purposes as are recognized by the Commissioner as public or charitable, one year before the death, the disposition or determination shall be excepted by this proviso- (a) if bona fide possession and enjoyment of the property in which the interest subsisted was assumed immediately thereafter by the person becoming entitled by virtue of or upon the disposition or determination and thenceforward retained to the entire exclusion of the person who immediately before the disposition or determination had the interest and of any benefit to him by contract or otherwise; or (b) in the case of a partial determination, if the conditions specified in sub-paragraph (a) were not satisfied by reason only of the retention or enjoyment by the deceased of possession of some part of the property, or of some benefit, by virtue of the provisions of the instrument under which he had the interest. (Added 1 of 1959 s. 3) [cf. 1940 c. 29 s. 43 (1) & (2) U. K.; 1950 c. 15 s. 43 U. K.] (2) In the application of subsection (1) (h) to a case in which an incumbrance on the property in which the interest in question subsisted has been created by associated operations which included a disposition of that interest, references to that property shall be construed as references to that property free from the incumbrance except in a case in which the incumbrance was created for consideration in money or money's worth which was applied for purposes calculated to maintain or increase the value of that property, and, in that case, shall be construed as references to that property subject to the incumbrance to the extent to which the consideration was so applied. (Added 1 of 1959 s. 3) [cf. 1940 c. 29 s. 43 (3) U. K.] (3) Subsection (1) (h) shall have effect only in relation to a person dying after the commencement of the Estate Duty (Amendment) Ordinance 1959 (1 of 1959), and paragraph (b) of that subsection shall not have effect in relation to such a person. (Added 1 of 1959 s. 3) [cf. 1940 c. 29 s. 43 (6) U. K.] (4) Property passing on the death of the deceased shall not be deemed to include property held by the deceased as trustee for another person, under a disposition not made by the deceased or under a disposition made by the deceased more than 3 years before the death, or in the case of a disposition made for such purposes as are recognized by the Commissioner as public or charitable, one year before the death where possession and enjoyment of the property was bona fide assumed by the beneficiary immediately upon the creation of the trust and thenceforward retained to the entire exclusion of the deceased or of any benefit to him by contract or otherwise: Provided that where property taken under such a disposition as a foresaid is deemed to be property passing on the death of the deceased by reason only that the property was not, as from the date of the disposition, retained to the entire exclusion of the deceased or a person who had an estate or interest limited to cease on the death of the deceased, and of any benefit to him by contract or otherwise, the property shall not be deemed to pass on the death of the deceased if subsequently, by means of the surrender of the benefit reserved or otherwise, it is enjoyed to the entire exclusion of the deceased or such other person as a foresaid and of any benefit to him by contract or otherwise, for a period of 3 years immediately preceding the death or in the case of a disposition made for such purposes as are recognized by the Commissioner as public or charitable, one year immediately preceding the death. (Amended 1 of 1959 s. 3) [cf. 1894 c. 30 s. 2 (3) U. K.; 1910 c. 8 s. 59 U. K.; 1946 c. 64 s.

47 U. K.] (5) Where property is settled by a person on himself for life, and after his death on any other person with an ultimate reversion of an absolute interest or absolute power of disposition to the settlor, the property shall not be deemed for the purpose of this Ordinance to pass to the settlor on the death of any such other person after the commencement of this Ordinance, by reason only that the settlor, being then in possession of the property as tenant for life, becomes, in consequence of such death, entitled to dispose of the whole property. [cf. 1896 c. 28 s. 14 U. K.] (6) (a) Where by a disposition of any property an interest is conferred on any person other than the disponer for the life of such person or determinable on his death, and such person enters into possession of the interest and thenceforward retains possession thereof to the entire exclusion of the disponer or of any benefit to him by contract or otherwise, and the only benefit which the disponer retains in the said property is subject to such life or determinable interest, and no other interest is created by the said disposition, then, on the death of such person the property shall not be deemed for the purposes of this Ordinance to pass by reason only of its reverter to the disponer in his lifetime.

(b) Where by a disposition of any property any such interest as above in this subsection mentioned is conferred on 2 or more persons, either severally or jointly, or in succession, this subsection shall apply in like manner as where the interest is conferred on one person.

(c) Provided that paragraphs (a) and (b) shall not apply where such person or persons taking the said life or determinable interest had at any time prior to the disposition been himself or themselves competent to dispose of the said property. [cf. 1896 c. 28 s. 15 U. K.] (7) Notwithstanding paragraphs (b), (c) and (h) of subsection (1) and notwithstanding subsection (4), property passing on the death of the deceased shall not be deemed to include property the subject of any surrender, assurance, divesting, disposition, forfeiture, disposal, donatio mortis causa, gift inter vivos or determination of an interest made, effected or suffered to or for the benefit in Hong Kong of any charitable institution or trust of a public character, or to the Government, the Urban Council or the Regional Council, for charitable purposes. (Added 29 of 1970 s. 2. Amended 74 of 1981 s. 2; 31 of 1990 ss.

3 &10) 7. Dispositions in favour of relatives (1) For the purposes of section 6 (1) (c), any disposition made by the deceased in favour of a relative of his shall be treated as a gift unless- (a) the disposition was made on the part of the deceased for full consideration in money or money's worth paid to him for his own use or benefit; or (b) the deceased was concerned in a fiduciary capacity imposed on him otherwise than by a disposition made by him and in such a capacity only: Provided that where the disposition was made on the part of the deceased for partial consideration in money or money's worth paid to him for his own use or benefit, the value of the consideration shall be allowed as a deduction from the value of the property for the purpose of estate duty.

[cf. 1950 c. 15 s. 46 (1) U. K.] (2) Where the deceased made a disposition of property in favour of a relative of his, the creation or disposition in favour of the deceased of an annuity or other interest limited to cease on the death of the deceased or of any other person shall not be treated for the purposes of this section or of section 13 (1) as consideration for the disposition made by the deceased, except as provided in section 8.

(3) Where there have been associated operations effected with reference to the receiving by the deceased of any payment in respect of such an annuity or other interest as is mentioned in subsection (2), or effected with a view to enabling him to receive or to facilitating the receipt by him of any such payment, this section and section 45 shall have effect in relation to each of those associated operations as they have effect in relation to the creation or disposition in favour of the deceased of such an annuity or other interest. [cf. 1940 c. 29 s. 44 (5) U. K.; 1950 c. 15 s. 46 (2) (a) U. K.] (4) In this section, section 8 and section 45- "annuity" includes any series of payments, whether inter-connected or not, whether of the same or of varying amounts, and whether payable at regular intervals or otherwise, and payments of dividends or interest on shares in or debentures of a company shall be treated for the purposes of the said provisions as a series of payments constituting an annuity limited to cease on a death if the payments are liable to cease on the death, or the amounts thereof are liable to be reduced on the death, by reason directly or indirectly of the extinguishment or any alteration of rights attaching to, or of the issue of, any shares in or debentures of a company; "relative" means- (a) wife or husband; (b) father and mother; (c) child, uncle and aunt; (d) any issue of a person falling within either (a), (b) or (c) above and the other party to a marriage with any such person or issue; (e) concubine recognized as such by the law appropriate to the marriage; and (f) references to "child" and "issue" include references to any illegitimate child and to any adopted child. [cf. 1940 c. 29 s. 44 (2) & (3) U. K.] (Added 1 of 1959 s. 4) 7A. Presumption of simultaneous death Where, after the commencement of the Estate Duty (Amendment) Ordinance 1982 (28 of 1982), 2 or more persons die in circumstances rendering it uncertain that any one of them, or which of them, survived the other or others, the property chargeable with estate duty in respect of each death shall be ascertained as if they had died at the same time and all relevant property had devolved accordingly.

(Replaced 28 of 1982 s. 3. Amended 62 of 1984 s. 11) 8. Exemptions (1) Subject to the provisions of this section, the relief specified herein shall be granted where, on the death of a person who has made a disposition of property in favour of a relative of his or a company, any estate duty becomes, or would but for this section become payable by virtue of section 7 (2).

(2) The sum on which estate duty would be payable apart form this section on the death in respect of the property which was the subject matter of the disposition or in respect of the property liable to a debt or incumbrance created by the deceased which was the subject matter of the disposition, as the case may be, shall first be computed and, subject to the limitations provided for by subsection (4), there shall then be allowed as a deduction from that sum- (a) the amount, if any, by which the aggregate of the payments which have been made on account of the annuity or other interest for the period from the date when the annuity or other interest began to accrue in favour of the deceased until his death, exceeds the aggregate of the income derived from the deceased by virtue of the disposition for the period from the date of the disposition until his death; and (b) simple interest on so much, if any, of the amount aforesaid, and for such period, as, in the opinion of the Commissioner, is in all the circumstances just, at the rate of 4 per cent per annum.

(3) In subsection (2), the expression "the aggregate of the income derived from the deceased by virtue of the disposition" means- (a) in relation to so much of the property which was the subject matter of the disposition as did not consist of a debt or incumbrance created by the deceased, such amount as, in the opinion of the Commissioner, is in all the circumstances equal to a reasonable return from the property; and (b) in relation to so much of the property which was the subject matter of the disposition as did consist of a debt or incumbrance created by the deceased, the aggregate amount of the interest paid or payable by the deceased in respect of that debt or incumbrance.

(4) The amount to be allowed as a deduction under subsection (2) shall, in the circumstances specified in the provisions of subsections (5), (6) and (7) be limited to the extent specified in those subsections respectively.

(5) If the annuity payments specified in subsection (2) (a) had formed the consideration for a debt created by the deceased equal to the total amount of those payments, and if section 13 (1) were applied to that debt, the full amount of that debt would not having regard to the operation of section 13 (2) have been allowable under subsection (1) of that section, the said annuity payments shall, for the purpose of ascertaining the amount to be allowed as a deduction under this section, be reduced so as not to exceed the amount, if any, which would have been allowable in the circumstances aforesaid under subsection (1) of that section: Provided that in applying the said subsection (2) for the purposes of this subsection, property which is the subject matter of the disposition shall not be treated as property derived from the deceased. [cf. 1944 c. 23 3rd Schd. 1 U. K.] (6) Where under section 7 a deduction for partial consideration would have been allowable in respect of the annuity or other interest if subsection (2) of that section had not applied to the disposition and if any other consideration for the disposition had not been given, the amount to be allowed as a deduction under this section shall not exceed the amount of that deduction. [cf. 1950 c. 15 s. 46 (2) U. K.] (7) Where the amount to be allowed as a deduction under this section is allowed as a deduction from the value of the property liable to a debt or incumbrance created by the deceased, it shall not exceed the amount, if any, which would be allowed under section 13 (1) if sections 7 and 45 had not been passed. [cf. 1944 c. 23 3rd Schd. 3 U. K.] (Added 1 of 1959 s. 4) [cf. 1944 c. 23 s. 40 U. K.] 9. Accretions to gifts inter vivos (1) Where any shares in or debentures of a company are comprised in a gift inter vivos and the donee is, as the holder of those shares or debentures, issued with shares in or debentures of the same or any other company, or granted any right to acquire any such shares or debentures, then, unless the issue or grant is made by way of exchange for the first mentioned shares or debentures, the shares or debentures so issued, or the right granted, shall be treated for the purposes of this Ordinance as having been comprised in the gift in addition to any other property so comprised.

(2) In subsection (1), the reference to an issue being made or right being granted to the donee as the holder of shares or debentures shall be taken to include any case in which an issue or grant is made to him as having been the holder of those shares or debentures, or is made to him in pursuance of an offer or invitation made to him as being or having been the holder of those shares or debentures, or of an offer or invitation in connexion with which any preference is given to him as being or having been the holder thereof.

(3) Where subsection (1) applies to determine, for purposes of estate duty, the property comprised in a gift inter vivos made by the deceased, the value of any consideration in money or money's worth given by the donee for the issue or grant referred to in the said subsection (1) shall be allowed as a deduction in valuing the property comprised in the gift as property deemed to pass on the death by virtue of the gift; but if any part, not being a sum of money, of the said consideration consists of property comprised in the same or another gift from the donor and deemed for purposes of estate duty to pass on his death, no deduction shall be made in respect of it under this subsection.

(4) For the purposes of subsection (3), there shall be left out of account so much, if any, of the consideration for any shares in or debentures of a company or for the grant of any right to be issued with any such shares or debentures, as consists in the capitalization of reserves of that company, or in the retention by that company, by way of set-off or otherwise, of any property distributable by it, or is otherwise provided directly or indirectly out of the assets or at the expense of that or any associated company; and for this purpose 2 companies shall be deemed to be associated if one has a controlling interest in the other, or if some person has a controlling interest in both.

(5) In the case of a donee who dies before the donor, subsections (1) to (4) inclusive shall apply as if he had not died, and as if the acts of his personal representative were his acts, and property taken by any person under his testamentary dispositions or on his intestacy, or partial intestacy, were taken under a gift made by him at the time of his death.

(6) For purposes of aggregation, any property which is by virtue of subsections (1) to (5) inclusive to be treated as comprised in a gift inter vivos made by the deceased shall be deemed to be property in which the deceased had an interest, except in so far as it is derived from property originally comprised in the gift in which the deceased never had an interest.

(7) For the purposes of estate duty, any question whether, possession and enjoyment of any property comprised in a gift inter vivos was at a particular time assumed or had by any person to the exclusion of any other person shall, so for as the question depends on the identity of the property, be determined by reference to the property which would for the time being be treated, in relation to the death if it occurred at that time, as property comprised in the gift.

(8) For the purposes of this section, the principal value of any property at a time before the death of the deceased shall be ascertained as it would be for the purposes of estate duty chargeable on his death if he had died immediately before that time. (Added 1 of 1959 s. 4) [cf. 1957 c. 49 s. 38 U. K.] 10. Exceptions for transactions for money consideration, property situate outside Hong Kong, shares on local registers and certain land in the New Territories Estate duty shall not be payable in respect of- (a) property passing on the death of the deceased by reason only of a bona fide purchase from the person under whose disposition the property passes nor in respect of the determination of any annuity for lives where such purchase was made or such annuity granted for full consideration in money or money's worth paid to the vendor or grantor for his own use or benefit.

Where any such purchase was made, or annuity granted, for partial consideration in money or money's worth paid to the vendor or grantor for his own use or benefit, the value of the consideration shall be allowed as a deduction from the value of the property for the purpose of estate duty; (Amended L. N. 63 of 1970) (b) property situate outside Hong Kong; (Amended 31 of 1990 s. 10) (c) any share or other interest of a deceased member of a company registered in a branch register kept out of Hong Kong under the Companies Ordinance (Cap. 32); (Amended 29 of 1970 s. 3; 6 of 1984 s. 259; 31 of 1990 s. 10) (d) property situate in the New Territories, other than New Kowloon, where the principal value of the estate does not exceed $2,000 or the minimum principal value for which a rate for the payment of estate duty has been provided under the applicable Schedule, whichever is the greater, and property situate elsewhere in Hong Kong, where the principal value of the estate does not exceed the minimum principal value for which a rate for the payment of estate duty has been provided under the applicable Schedule; (Replaced 47 of 1962 s. 4. Amended 31 of 1990 s. 10) (e) any temple for the worship of ancestors, situate in the New Territories, other than New Kowloon, registered in the name of the manager of a clan, family or t'ong, and so much of any clan, family or t'ong property similarly registered as is used for the maintenance of such temple; (Added 38 of 1935 s. 2) (f) any other temple in the New Territories, other than New Kowloon, certified by the Secretary for Home Affairs to be a Chinese temple as defined in section 2 of the Chinese Temples Ordinance (Cap. 153), and so much of any property as is used for the maintenance of such temple; (Added 38 of 1935 s. 2. Amended L. N. 94 of 1974; L. N. 370 of 1981; L. N. 14 of 1983; L. N. 262 of 1989) (g) property devised or bequeathed by the deceased or otherwise passing on the death of the deceased to or for the benefit in Hong Kong of any charitable institution or trust of a public character, or to the Government, the Urban Council or the Regional Council, for charitable purposes; (Added 29 of 1970 s. 3. Amended 74 of 1981 s. 3; 31 of 1990 ss.

4 & 10) (h) any property consisting of a pension, annuity, lump sum, gratuity or other like benefit (including any right or entitlement thereto) passing on the death of a deceased member of an approved retirement scheme (within the meaning of the Inland Revenue Ordinance (Cap. 112)), that is to be paid or afforded under the terms or provisions of that scheme. (Added 31 of 1990 s. 4) [cf. 1894 c. 30 s. 3 U. K.] 10A. Exception for matrimonial home (1) Estate duty shall not be payable in respect of property- (a) which was; immediately before the death of the deceased- (i) a residence owned by him and occupied solely by him exclusively for residential purposes; and (ii) the matrimonial home of the deceased and his spouse; and (b) which is devised or bequeathed by the deceased, or otherwise passes on his death, to or for the benefit of his spouse.

(2) For the purposes of subsection (1) and (3)- (a) property shall be deemed to be a residence and deemed to be capable of being a matrimonial home if the property is the exclusive right to enjoy the residence together with the right to an undivided share in land on which the residence is situated; (b) a residence shall be deemed to be owned by the deceased if the property is owned by him or by him and his spouse; (c) a residence shall be deemed to be occupied solely by the deceased if it is occupied solely by him or by him and his spouse and family; (d) property to which subsection (1) (a) applies shall, if the deceased- (i) died intestate as to that property; and (ii) is survived by his spouse, be deemed to have passed on his death to or for the benefit of his spouse.

(Added 18 of 1986 s. 2) (3) Where more than one residence would, under subsection (1) and but for this subsection, be exempt from estate duty, only one residence shall be so exempt and the executor may, by notice in writing to the Commissioner, elect which residence shall be exempt; in default of which, the Commissioner shall make the election.

(4) For the purpose of determining the rate of estate duty to be paid on property passing on death in respect of which estate duty is payable, the property of the deceased exempt from estate duty under this section and the property in respect of which estate duty is payable shall be aggregated and, subject to section 11, estate duty shall be paid on the property in respect of which estate duty is payable as if the value of the property of the deceased exempt from estate duty under this section formed part of the principal value of the estate.

(Added 28 of 1982 s. 4) 11. Aggregation of property (1) For determining the rate of estate duty to be paid on any property passing on the death of the deceased, all property so passing in respect of which estate duty is payable shall be aggregated so as to form one estate, and the duty shall be paid at the proper graduated rate on the principal value thereof: Provided that any property so passing, in which the deceased never had an interest, shall not be aggregated with any other property but shall be an estate by itself, and the duty shall be paid at the proper graduated rate on the principal value thereof. (Amended 1 of 1959 s. 5) [cf. 1894 c. 30 s. 4 U. K.] (2) For the purposes of this section, the deceased shall be deemed to have had an interest in any property included, or deemed to be included, by virtue of- (a) section 6 (1) (f); or (b) section 35, in the property passing on his death. (Added 1 of 1959 s. 5) [cf. 1939 c.

41 s. 30 (2) U. K.; 1940 c. 29 s. 52 U. K.] (3) The proviso to subsection (1) shall not have effect in relation to property consisting of a debt, or right, or benefit, passing on the death of the deceased, that is treated as property by virtue of section 3 (2) (d) or (e). (Added 1 of 1959 s. 5) [cf. 1940 c. 29 s. 45 (3) U. K.] (4) Where the property which passes on a death, but in which the deceased never had an interest, includes any policies of assurance on his life, or moneys received under such a policy, or interests in such a policy or moneys, then the rate of estate duty to be paid on any such policy, money or interest so included (hereinafter referred to as "a life insurance") shall be determined as follows- (a) in respect of the value of any life insurance or interest in a life insurance to which immediately after the death any one person is absolutely and indefeasibly entitled for his own benefit otherwise than by virtue of a purchase for consideration in money or money's worth, whether of that life insurance or interest or of the policy or otherwise, the rate shall be that appropriate to the value or aggregate value of that life insurance or interest and of any other life insurance or interest in a life insurance to which he is so entitled; (b) subject to paragraph (a) the rate shall be that appropriate to the aggregate value of all the life insurance or, if there is only one, to the value of that life insurance: Provided that for the purposes of this subsection- (i) where any life insurance or interest in a life insurance is immediately after the death subject to a mortgage or charge, the mortgage or charge shall be disregarded and the life insurance or interest shall be valued accordingly; and (ii) in relation to life insurances and interests therein which then form part of the unadministered estate of a deceased person this subsection shall have effect as if that person had been then living and entitled to those life insurances and interests. [cf. 1954 c. 44 s. 33 U. K.] (5) For the purposes of subsection (4) (a), the value of any interest in a policy of assurance or moneys received under such a policy shall be arrived at by apportioning the total value of the policy or moneys according to the respective values of the interest in question and of the interest a person would have if, except for the interest in question, he were absolutely and indefeasibly entitled to the policy or moneys. (Added 1 of 1959 s. 5) 12. Payment of estate duty (1) Estate duty shall be payable as hereinafter mentioned.

(2) The executor of the deceased shall pay the estate duty in respect of all property, of which the deceased was competent to dispose at the date of his death, on delivering the affidavit for the Commissioner, and may pay in like manner the estate duty in respect of any other property passing on such death, which by virtue of any testamentary disposition of the deceased is under the control of the executor or, in the case of property not under his control, if the persons accountable for the estate duty in respect thereof request him to make such payment. (Amended 47 of 1962 s. 5) (3) Where the executor does not know the amount or value of any property which has passed on the death, he may state in the affidavit for the Commissioner that such property exists, but that he does not know the amount or value thereof and that he undertakes as soon as the amount and value are ascertained to bring in an account thereof and to pay both the estate duty for which he is or may be liable and any further estate duty payable by reason thereof for which he is or may be liable in respect of the other property mentioned in the affidavit.

(4) Estate duty so far as not paid by the executor shall be paid on an account setting forth the particulars of the property and delivered to the Commissioner within 6 months after the death, by the person accountable for the estate duty or within such further time as the Commissioner may allow. Such duty shall be paid on delivering the account. (Amended 47 of 1962 s. 5) (5) Every estate shall include all income accrued upon the property included therein down to and outstanding at the date of the death of the deceased.

(6) In addition to any estate duty payable, interest shall accrue and be payable on such duty while it remains unpaid at the rate of 4 per cent per annum from the date of the death of the deceased until the expiration of 6 months from the death and at the rate of 8 per cent per annum thereafter: (Replaced 47 of 1962 s. 5) Provided that unless the Commissioner in any particular case with the approval of the Governor in Council otherwise directs- (a) in the case of any death occurring on or before 7 December 1941, no interest under this subsection shall be payable in respect of the period from 8 December 1941 to 2 March 1946 and no part of the said period shall be taken into consideration for the purpose of computation of the period of 6 months referred to in this subsection, and (b) in the case of any death occurring subsequent to 7 December 1941 and prior to 2 March 1946, the latter date shall be substituted for the date of death for the purposes of this subsection. (Added 24 of 1950 Schedule.

Amended 47 of 1962 s. 5) (7) The estate duty which is to be collected upon an affidavit for the Commissioner or on an account, shall be due on the delivery thereof or on the expiration of 6 months from the death, whichever first happens.

(8) A rateable part of the estate duty on an estate in proportion to the value of any leasehold property held solely by the deceased may at the option of the person delivering the account be paid by 8 equal yearly instalments, or 16 half-yearly instalments, and the first instalment shall be due at the expiration of 6 months from the death, and the interest on the unpaid portion of the duty shall be added to each instalment and paid accordingly; but the duty for the time being unpaid, with such interest to the date of payment, may be paid at any time, and in case the property is sold shall be paid on completion of the sale, and if not so paid shall be duty in arrear. (Added 1 of 1959 s. 14. Amended 47 of 1962 s. 5) (Amended 47 of 1962 s. 5) [cf. 1894 c. 30 s. 6 U. K.] 13. Value of property; allowance for debts and funeral expenses (1) In determining the value of an estate for the purpose of estate duty, allowance shall be made for reasonable funeral expenses incurred in Hong Kong not exceeding-(Amended 31 of 1990 s. 10) (a) in the case of persons dying before 1 January 1963 $1,000 or 2.5 per cent of the ascertained value of the estate, whichever is the smaller; (b) in the case of persons dying on or after 1 January 1963 but before 1 April 1972, $2,000 or 2.5 per cent of the ascertained value of the estate, whichever is the smaller; (c) in the case of persons dying on or after 1 April 1972 but before the commencement of the Estate Duty (Amendment) Ordinance 1977, $5,000 or 2.5 per cent of the ascertained value of the estate, whichever is the smaller; (d) in the case of persons dying on or after the commencement of the Estate Duty (Amendment) Ordinance 1977, $10,000, and for debts and incumbrances but an allowance shall not be made- (i) for debts incurred by the deceased and incumbrances created by a disposition made by the deceased, unless such debts or incumbrances were incurred or created bona fide for full consideration for money or money's worth wholly for the deceased's own use and benefit and take effect out of his interest; nor (ii) for any debt in respect whereof there is a right to reimbursement from any other estate or person unless such reimbursement cannot be obtained; nor (iii) more than once for the same debt or incumbrance changed upon different portions of the estate, and any debt or incumbrance for which an allowance is made shall be deducted from the value of the property liable thereto. (Replaced 31 of 1977 s. 3) (2) Any allowance which but for this subsection would be made under subsection (1) for a debt incurred by the deceased as mentioned in paragraph (i) of that subsection, or for an incumbrance created by a disposition made by the deceased, as therein mentioned shall be subject to abatement to an extent proportionate to the value of any of the consideration given therefor which consisted of- (a) property derived from the deceased; or (b) consideration not being such property as aforesaid, but given by any person who was at any time entitled to, or amongst whose resources there was at any time included, any property derived from the deceased: Provided that if, where the whole or a part of the consideration given consisted of such consideration as is mentioned in paragraph (b) of this subsection, it is proved to the satisfaction of the Commissioner that the value of the consideration given, or of that part thereof, as the case may be, exceeded that which could have been rendered available by application of all the property derived from the deceased, other than such, if any, of that property as is included in the consideration given or as to which the like facts are proved in relation to the giving of the consideration as are mentioned in the first provision to section 6 (1) (f) in relation to the purchase or provision of an annuity or other interest, no abatement shall be made in respect of the excess, and in this subsection the expressions "property derived from the deceased" and "subject matter" have the meanings respectively attributed to them in section 6 (1) (f). (Added 1 of 1959 s. 6) [cf. 1939 c. 41 s. 31 (1) U. K.; 1943 c. 28 s. 26 U. K.] (3) Where a debt or incumbrance has been incurred or created in whole or in part for the purpose of or in consideration for the purchase or acquisition or extinction, whether by operation of law or otherwise, of any interest in expectancy in any property passing or deemed to pass on the death of a deceased person, and any person whose interest in expectancy is so purchased, acquired, or extinguished becomes (under any disposition made by, or through devolution of law from, or under the intestacy of, the deceased) entitled to any interest in that property, than in determining the value of the estate of the deceased for the purpose of estate duty no allowance shall be made in respect of such debt or incumbrance, and any property charged with any such debt or incumbrance shall be deemed to pass freed from that debt or incumbrance: Provided that- (a) if part only of such debt or incumbrance was incurred or created for such purpose or as such consideration as aforesaid, this provision shall apply to that part of such debt or incumbrance only; and (b) if a person whose interest in expectancy in the property so purchased, acquired, or extinguished becomes entitled to an interest in part only of that property, this provision shall apply only to such part of the debt or incumbrance as bears the same proportion to the whole debt or incumbrance as the value of the part of the property to an interest in which he becomes entitled bears to the value of the whole of that property. [cf.

1910 c. 8 s. 57 U. K.] (4) No allowance shall be made for debts due from the deceased, other than debts contracted in Hong Kong to persons ordinarily resident therein, unless charged on property situate within Hong Kong. (Amended 31 of 1990 s. 10) (5) (a) The principal value of any property shall be estimated to be the price which, in the opinion of the Commissioner, such property would fetch if sold in the open market at the time of the death of the deceased.

(b) In estimating such principal value the Commissioner shall not make any reduction in the estimate on account of the estimate being made on the assumption that the whole property is to be placed on the market at one and the same time: Provided that where it is proved to the Commissioner that the value of the property has been depreciated by the reason of the death of the deceased the Commissioner in fixing the price shall take such depreciation into account. [cf. 1894 c. 30 s. 7 (5) U. K.; 1910 c. 8 s. 60 U. K.] (6) When an estate includes an interest in expectancy, estate duty in respect of that interest shall be paid, at the option of the person accountable for the estate duty, either with the duty in respect of the rest of the estate or when the interest falls into possession, and if the duty is not paid with the estate duty in respect of the rest of the estate, then- (a) for the purpose of determining the rate of estate duty in respect of the rest of the estate the value of the interest shall be its value at the date of the death of the deceased; and (b) the rate of estate duty in respect of the interest when it falls into possession shall be calculated according to its value when if falls into possession, together with the value of the rest of the estate as previously ascertained. [cf. 1894 c. 30 s. 7 (6) U. K.] (7) The value of the benefit accruing or arising from the cesser of an interest ceasing on the death of the deceased shall- (a) if the interest extended to the whole income of the property, be the principal value of that property; and (b) if the interest extended to less than the whole income of the property, be the principal value of an addition to the property equal to the income to which the interest extended. [cf. 1894 c.

30 s. 7 (7) U. K.] (8) The value of any property for the purpose of estate duty shall be ascertained by the Commissioner in such manner and by such means as he thinks fit, and, if he authorizes any person to inspect any property and to report to him the value thereof for the purposes of this Ordinance, the person having the custody or possession of that property shall permit the person so authorized to inspect it at such reasonable times as the Commissioner considers necessary. [cf. 1894 c. 30 s. 7 (8) U.

K.] (9) When the Commissioner requires a valuation to be made by a person named by him, the reasonable costs of such valuation shall be defrayed by the Commissioner. [cf. 1894 c. 30 s. 7 (9) U. K.] 14. Recovery of estate duty, etc.

(1) All duty, interest and penalties payable under this Ordinance shall be recoverable by the Commissioner by action in the District Court, notwithstanding that the amount is in excess of the sum mentioned in section 33 of the District Court Ordinance (Cap. 336): (Amended 68 of 1973 s. 5; 79 of 1981 s. 3) Provided that nothing in this section shall affect any other remedy for the recovery of duty, interest or penalties payable under this Ordinance.

(Replaced 47 of 1962 s. 7) (2) In proceedings in the District Court under this section the production of a certificate signed by the Commissioner stating the name and last known postal address of the person sued and the particulars of the duty, interest or penalty claimed from him shall be sufficient evidence of the amount so claimed and sufficient authority for the District Court to give judgment for such amount. (Added 47 of 1962 s.

7. Amended 31 of 1976 s. 3) (2A) In proceedings under this section for the recovery of any duty, interest or penalties the court shall not entertain any plea that the amount claimed is excessive, incorrect or under appeal. (Added 31 of 1976 s. 3) (3) In proceedings in the District Court under this section, the Commissioner may appear in person or may be represented either by a legal officer within the meaning of the Legal Officers Ordinance (Cap. 87) or by any other person authorized by him in writing. (Added 47 of 1962 s. 7) (4) In any proceedings for the recovery of any such duty, interest, fine, penalty or forfeiture in respect of any property passing on the death of any person on or after 1 January 1916, it shall not be necessary to issue concurrent writs, informations or other process. Service of the writ, information or other process shall, where practicable, be personal; but the order of a judge may be obtained, in special circumstances, to dispense with personal service and giving directions as to substituted service or as to notice of the proceedings and time for appearance whether by posting copies to addresses within or without the jurisdiction or otherwise as in the circumstances may seem just. [cf. Exchequer Rules 1860 r. 3 U. K.] (5) In any such proceedings the court shall have jurisdiction to appoint a receiver of the property and the rents and profits thereof and to order a sale of the property. The provisions of Order 30, rules 2 and 3 of the Rules of the Supreme Court (Cap. 4 sub. leg.) shall apply in the case of any order made under this subsection. [cf. 1894 c. 30 s. 8 (13) U. K.] (6) Subject to section 14A, every executor shall, to the best of his knowledge and belief, specify in appropriate accounts annexed to an affidavit for the Commissioner all the property in respect of which estate duty is payable upon the death of the deceased, and also (unless exempted in writing by the Commissioner) any property of which the deceased was a trustee for another person, and shall be accountable for the estate duty in respect of all property, of which the deceased was competent to dispose at his death, but shall not be liable for any duty in excess of the assets which he has received as executor or might but for his own neglect or default have received. (Amended 27 of 1972 s. 4) [cf. 1894 c. 30 s. 8 (3) U. K.] (7) Where property passes on the death of the deceased and his executor is not accountable for the estate duty in respect of such property, every person to whom any property so passes for any beneficial interest in possession, and also to the extent of the property actually received or disposed of by him, every trustee, guardian, committee or other person in whom any interest in the property so passing or the management thereof is at any time vested, and every person in whom the same is vested in possession by alienation or other derivative title, shall be accountable for the estate duty on the property, and shall, within the time required by this Ordinance or such later time as the Commissioner allows, deliver to the Commissioner an appropriate account specifying the property in question to the best of his knowledge and belief: Provided that nothing in this section shall render a person accountable for duty who acts merely as agent for another person in the management of property. [cf. 1894 c. 30 s. 8 (4) U. K.] (7A) Notwithstanding subsections (6) and (7), where a beneficial interest in property vested in the deceased and another person jointly passes or accrues by survivorship on the death of the deceased- (a) the executor; and (b) the person to whom the beneficial interest so passes or accrues, shall be accountable for the estate duty in respect of such property and shall, within the time required by this Ordinance, or such later time as the Commissioner allows, deliver to the Commissioner an appropriate account specifying the property in question to the best of his (or their) knowledge and belief. (Added 29 of 1970 s. 4) (8) The Commissioner may summon before him any person accountable for estate duty or any person who is, in the opinion of the Commissioner, so accountable, and any person whom the Commissioner believes to have taken possession of or administered any part of the estate in respect of which estate duty is leviable on the death of the deceased, or of the income of any part of such estate, and any person whom the Commissioner believes to be indebted to the deceased, and any person whom the Commissioner believes to be capable of giving information as to such estate and may examine such person and may require any such person to produce any documents in his custody or power the inspection whereof may tend to secure the payment of any duty under this Ordinance or the proof or discovery of any fraud or omission in relation to any such duty. Any such person shall at all reasonable times permit any person thereunto authorized by the Commissioner to inspect all such documents as aforesaid and to make such notes, copies or extracts thereof or therefrom as he may deem necessary without fee or reward. The Commissioner may also require any such person to deliver to him and verify on oath a statement in writing of such particulars. (Amended 29 of 1970 s. 4) [cf. 1894 c. 30 s. 8 (5) U. K.] (9) Subsection (8) shall apply to any company on a death on which it appears to the Commissioner that section 35 or 44 has effect in respect of that company, and to every person who is or was at any time an officer, or an auditor of that company, as it applies to a person whom the Commissioner believes to have taken possession of or administered any part of an estate in respect of which estate duty is leviable. (Added 1 of 1959 s. 7) [cf. 1940 c. 29 s. 57 (1) U. K.] (10) Nothing in this section shall render a bona fide purchaser for valuable consideration without notice liable to or accountable for estate duty. [cf. 1894 c. 30 s. 8 (18) U. K.] (11) All affidavits and accounts required under this section shall be delivered to the Commissioner, who shall make such inquiry respecting the contents of, or the particulars verified by, such affidavit or accounts and the value of the various properties included therein as he thinks necessary, and the person making or tendering any such affidavit shall attend at the office of the Commissioner, whenever required by him, and shall furnish and produce such explanations and documentary or other evidence as the Commissioner may require.

(12) When the Commissioner has ascertained the amount of estate duty payable in respect of any accounts delivered to him in pursuance of this Ordinance he shall notify the accountable person of his decision by means of a certificate in the prescribed form. If such amount exceeds the amount of estate duty already paid in respect of the said accounts the accountable person shall forthwith pay the excess to the Commissioner.

(13) In every case in which the Commissioner is satisfied that too much estate duty has been paid, the excess, together with any interest which has been paid in accordance with section 12 (6), shall be repaid by the Commissioner. (Replaced 29 of 1970 s. 4) (14) Where the accountable person discovers that for any reason too little estate duty has been paid he shall forthwith deliver to the Commissioner a further account, verified by oath, and shall at the same time pay the difference between the estate duty chargeable according to the true value of the estate and the estate duty already paid.

(15) Notwithstanding subsection (12) and section 12, if- (a) the Commissioner is not satisfied with the affidavit or accounts delivered by any person; or (b) a person has not delivered an affidavit or accounts within 6 months after the death, whether or not he has been requited by the Commissioner so to do, and the Commissioner is of the opinion that such person is accountable for estate duty, the Commissioner may, according to the best of his judgment, assess the amount of estate duty which is in his opinion payable and he shall thereupon notify the person who is in his opinion accountable and call upon him to pay such estate duty. (Replaced 29 of 1970 s. 4) (15A) Notwithstanding subsection (12) and section 12, the amount of estate duty assessed under subsection (15) shall be paid within one month after the giving of notice by the Commissioner. (Added 29 of 1970 s. 4) (16) The Commissioner may remit the interest payable on estate duty where the amount of such interest is in his opinion so small as not to repay the expense and labour of calculation and account.

(17) Every person or company who without lawful authority or reasonable cause fails to comply with any of the provisions of this section shall be liable to pay to the Commissioner, in addition to the estate duty (if any)- (a) a penalty of $1,000 or, in the case of such a company as is referred to in subsection (9) or an officer or auditor of such a company, $5,000; or (b) a penalty equal to the amount of the estate duty (if any) at the rate set out in the applicable Schedule remaining unpaid for which he or the company is accountable, according as the Commissioner elects. (Replaced 29 of 1970 s. 4) 14A. Exemption of executors of small estates (1) If the Commissioner is satisfied- (a) that an executor has, to the best of his knowledge and belief, disclosed in such manner as the Commissioner may determine- (i) all of the property belonging to a deceased; and (ii) all of the property held by the deceased as trustee for another person; (b) that the principal value of the property belonging to the deceased does not exceed $400,000; and (c) that no estate duty is payable on the death of the deceased, the Commissioner may, subject to any conditions which he may specify, exempt the executor from section 14 (6).

(2) Where the Commissioner exempts any executor under subsection (1) he shall issue to the executor a certificate of exemption in such form as he may determine.

(3) If, at any time after he has issued to an executor a certificate of exemption under subsection (2), the Commissioner has reasonable grounds for believing- (a) that the principal value of the property belonging to the deceased exceeds $400,000; or (b) that estate duty is payable on the death of the deceased, the Commissioner may withdraw the exemption granted to the executor under subsection (1) and cancel the certificate of exemption, whereupon this Ordinance shall apply as if the exemption had not been granted.

(Added 21 of 1972 s. 5. Amended 29 of 1981 s. 5) 15. Probate not to be issued until estate duty paid (1) No probate or letters of administration shall be issued by the court until the Commissioner shall have certified in writing that the estate duty payable by the executor upon the estate in respect of which probate or letters of administration is sought has been paid or that he has allowed payment thereof to be postponed under subsections (2) and (3).

(Amended 1 of 1959 s. 8) (2) When the affidavit for the Commissioner contains the statement and undertaking specified in section 12 (3), the Commissioner may allow payment of the whole or any part of the estate duty to be postponed until after the issue of probate or letters of administration upon condition that a further and complete affidavit shall be filed and the proper estate duty paid thereon as soon as the full value of the estate has been ascertained and the Commissioner may require the person applying for such probate or letters of administration to enter into a bond with or without sureties in such an amount as he shall think fit to escure the filing of such affidavit as aforesaid and the payment of the proper estate duty thereon within such time as shall be named in such bond. Such bond may be in the prescribed form.

(3) Where the Commissioner is satisfied that the estate duty leviable in respect of any property cannot without excessive sacrifice be raised at once, he may allow payment to be postponed for such period, to such extent and on payment of such interest not exceeding 8 per cent per annum or any higher interest yielded by the property, and on such terms as the Commissioner may think fit.

[cf. 1894 c. 30 s. 8 (9) U. K.] (4) Where the Commissioner allows payment to be postponed under subsection (2), he may reduce or remit any interest payable.

16. Increase of estate duty when delay in lodging affidavit (1) In every case where any account is delivered after the lapse of 12 months from the death, the estate duty shall, without prejudice to the exercise of the Commissioner's discretion under section 27, be charged at twice the rates set out in the applicable Schedule, unless the person accountable for the estate duty satisfies the Commissioner that there is a reasonable excuse for the delay in the delivery of the account: (Replaced 47 of 1962 s. 8) Provided that in any case in which, before the delivery of the account, a grant of probate or of letters of administration or its equivalent had been obtained from a competent court outside Hong Kong, the period shall be 18 months from the death instead of one year: (Amended 31 of 1990 s.

10) Provided also that unless the Commissioner in any particular case with the approval of the Governor in Council otherwise directs- (a) in the case of any death occurring before 8 December 1941, the period from such date to 2 March 1946 shall not be taken into consideration for the purposes of this subsection; and (b) in the case of any death occurring on or after 8 December 1941 and before 2 March 1946, the latter date shall be substituted for the date of the death referred to in the second and eleventh lines of this subsection.

(Added 24 of 1950 Schedule) (2) For the purposes of this section, no account shall be deemed to have been delivered until the duty which reasonably appears to be payable in respect thereof has been paid, unless the Commissioner shall have allowed payment of the estate duty in respect of the said account to be postponed.

(3) For the purposes of this section, interest shall be charged only on the duty which would have been payable if the duty had been charged at the rate set out in the applicable Schedule. (Added 47 of 1962 s. 8) 17. Duty of executor as to unregistered shares (1) Every executor, within one year after obtaining probate or letters of administration to the estate of a deceased person and before selling or otherwise disposing of any shares in any company, registered under or incorporated by any Ordinance of Hong Kong, of which shares the deceased person was at the date of his death the beneficial owner under a transfer in blank and not the registered owner, shall cause such shares to be transferred on the registers of the appropriate companies into the name of the deceased, who shall then be deemed to have been so registered at the time of his death. (Amended 31 of 1990 s. 10) (2) Every such company, notwithstanding anything in any enactment or in its constitution, memorandum, articles or regulations to the contrary, shall effect registration on payment of the usual registration charges (if any) and in default shall be liable on summary conviction to a fine of $1,000.

(3) Every executor who without reasonable excuse omits to obtain the registration of any such shares as aforesaid within the time limit aforesaid shall be liable to pay to the Commissioner in addition to the estate duty (if any) a penalty of $1,000, or, at the option of the Commissioner, a penalty equal to the amount of the estate duty (if any) at the rate set out in the applicable Schedule.

18. Charge of estate duty on property (1) Subject to subsection (2)- (a) a rateable part of the estate duty on an estate, in proportion to the value of any property which does not pass to the executor as such, shall be a first charge on the property in respect of which estate duty is leviable; (b) a rateable part of the estate duty on an estate paid by instalments under section 12 (8), in proportion to the value of any leasehold property held solely by the deceased, shall be a first charge on the property: Provided that the property shall not be chargeable as against a bona fide purchaser thereof for valuable consideration without notice. (Replaced 1 of 1959 s. 15) (2) Notice of any charge on any leasehold property constituted by subsection (1) may be given by the Commissioner registering in the Land Registry against the property affected thereby a Memorial signed by him specifying the subsection under which the charge is constituted, the name, description, and date of death of the deceased in respect of whose estate the claim to estate duty arises, and particulars of the property charged.

(Added 1 of 1959 s. 15. Amended 8 of 1993 s. 2) (3) A notice in writing of any charge under subsection (1) or (2) may be entered in the Land Registry as an instrument affecting land. (Added 1 of 1959 s. 15. Amended 8 of 1993 s. 2) (4) If the rateable part of the estate duty in respect of any property is paid by the executor, it shall where occasion requires be repaid to him by the trustees or owners of the property.

(5) A person authorized or required to pay the estate duty in respect of any property shall, for the purpose of paying the estate duty or raising the amount of the estate duty when already paid, have power, whether the property is or is not vested in him, to raise the amount of such estate duty and any interest and expenses properly paid or incurred by him in respect thereof by the sale or mortgage or a terminable charge on that property or any part thereof.

(6) A person having a limited interest in any property who pays the estate duty in respect of that property shall be entitled to the like charge as if the estate duty in respect of that property had been raised by means of a mortgage to him.

(7) Any money arising from the sale of property comprised in a settlement or held upon trust to lay out upon the trusts of a settlement may be expended in paying any estate duty in respect of property comprised in the settlement and held upon the same trusts. [cf. 1894 c. 30 s. 9 U. K.] 19. Apportionment of estate duty (1) In the case of property which does not pass to the executor as such, an amount equal to the proper rateable part of the estate duty may be recovered by the person, who being authorized or required to pay the estate duty in respect of any property has paid such duty, from the person entitled to any sum charged on such property (whether as capital or as an annuity or otherwise) under a disposition not containing any express provision to the contrary.

(2) Any dispute as to the proportion of estate duty to be borne by any property or person may be determined upon application by way of summons in the High Court, and where the amount claimed does not exceed the sum mentioned in section 33 of the District Court Ordinance (Cap. 336) such application shall be made to the District Court. (Amended 35 of 1950 s. 4; 35 of 1966 s. 6; 68 of 1973 s. 5; 79 of 1981 s. 3) (3) Any party from whom a rateable part of estate duty can be recovered under this section shall be bound by the accounts and valuations as settled between the person entitled to recover the same and the Commissioner.

[cf. 1894 c. 30 s. 14 U. K.] 20. Remission and refunding of estate duty on certain grounds. Proviso regarding war deaths The Governor in Council may remit the payment of any estate duty or may order a refund of the whole or any portion of any estate duty which may have been paid to the Commissioner, for the remission or refund of which any equitable claim is proved to his satisfaction: Provided that in respect of deaths occurring on or between 8 June 1941 and 1 March 1946, the Commissioner in lieu of the Governor in Council may remit the payment of any estate duty or order the refund of the whole or any portion of any estate duty, and for the purpose of the exercise of such discretion the Commissioner shall take into account the provisions of paragraph 1 of Order No. 3, made on 1 March 1946, under Proclamation No.

16 made by the British Military Administration, as amended from time to time, whether that Order shall have been repealed or not. (Added 24 of 1950 Schedule) 21. Remission in case of successive war deaths Where the Commissioner is satisfied- (a) that estate duty has become payable on property passing on a death between 8 December 1941 and 16 September 1945 of a person who- (i) dies from wounds inflicted, accident occurring or disease contracted, within 3 years before death, on active service against the enemy on land or sea or in the air or on service which in the opinion of the Commissioner is of a warlike nature or involves the same risk as active service and such person was at the time when the wounds were inflicted or when the accident occurred or disease was contracted subject to any naval military or air force discipline; or (ii) dies from injuries received within 3 years of death and which were in the opinion of the Commissioner caused by operations of war or received during internment or imprisonment in Hong Kong or in any territory controlled at the time of such internment or imprisonment by a sovereign or state then at war with His Majesty or dies from any cause which in the opinion of the Commissioner was attributable to such internment or imprisonment; and (Amended 31 of 1990 s. 10) (b) that subsequent estate duty has again become payable during the same period on the same property or any part thereof on another such death, being the death of a person to whom that property or that part thereof passed on the earlier death, then the whole of the estate duty payable on the later death on that property or that part thereof shall be remitted or, if paid, shall be repaid. That property or that part thereof shall not be aggregated with any other property passing on a later death for the purpose of determining the rate of estate duty.

(Added 24 of 1950 Schedule) 22. Appeal to High Court (1) Any person who is aggrieved by a decision of the Commissioner under section 14 (12) or by an assessment of the Commissioner under section 14 (15) as to the amount of estate duty payable and whether he is aggrieved on the ground of- (a) property being considered to be property in respect of which estate duty is payable and for which he is considered accountable; (b) the valuation of any property; or (c) the rate of duty charged, may, subject to subsection (1A), on payment of or giving security for as hereinafter mentioned, the duty claimed by the Commissioner or such portion of it as is then payable by him, appeal to the High Court within 3 months from the date of notification of the decision or assessment and his accountability or the amount of duty payable shall be determined by the High Court and if the duty is less than that paid to the Commissioner or if no duty is payable the excess shall be repaid. (Replaced 29 of 1970 s.

5) (1A) The Commissioner may, where satisfied that a person proposes to appeal under subsection (1), allow payment of the duty claimed by him to be postponed for such period, to such extent and on payment of such interest (if any) not exceeding 8 per centum per annum and on such terms as the Commissioner may think fit. (Added 29 of 1970 s. 5) (1B) Where the value of the property as alleged by the Commissioner in respect of which the dispute arises does not exceed $200,000 the appeal under this section shall be to the District Court. (Added 29 of 1970 s. 5.

Amended 79 of 1981 s. 2) (1C) The amount mentioned in subsection (1B) may be amended by resolution of the Legislative Council. (Added 79 of 1981 s. 2) (2) No appeal shall be allowed from any order, direction, determination or decision of the High Court or the District Court under any appeal under this section except with the leave of the High Court or the District Court, as the case may be, or of the Court of Appeal. (Added 29 of 1970 s.

5) (3) The costs of the appeal shall be in the discretion of the court, and the court, where it appears to the court just, may order the Commissioner to pay on any excess of duty repaid by him interest at such rate per cent per annum and for such period as appears to the court just.

(4) Provided that the High Court or the District Court, as the case may be, if satisfied that it would impose hardship to require the appellant as a condition of the appeal to pay the whole or, as the case may be, any part of the duty claimed by the Commissioner or of such portion of it as is then payable by him, may allow an appeal to be brought on payment of no duty or of such part only of the duty as to the court seems reasonable and on security to the satisfaction of the court being given for the duty or so much of the duty as is not paid, but in such case the court may order interest at such rate per cent per annum as appears to the court just to be paid on the unpaid duty so far as it becomes payable under the decision of the court. (Amended 29 of 1970 s. 5) 23. Schedule of property to be annexed to probate (1) A schedule under the hand of the Commissioner of all the property passing on the death of a deceased person upon which estate duty has been paid or is payable on the death, and of all the property of a deceased person which, being trust property, is exempt from duty on the death shall be annexed to the probate or letters of administration, and any person who, without lawful authority or reasonable excuse, in any way deals with any estate of the deceased or any property held by the deceased in trust, which is not set out in such schedule, shall be liable to a penalty of $1,000, or to a penalty equal to 3 times the amount of the estate duty at the rate set out in the applicable Schedule to this Ordinance payable upon the estate so dealt with, at the election of the Commissioner: Provided that the disclosure of any trust relating to property in any such schedule shall not constitute notice of the trust as against any purchaser or mortgagee for valuable consideration.

(2) Whenever a further affidavit is delivered, the probate or letters of administration in respect of which such affidavit is delivered shall be lodged with the Commissioner who shall insert in the schedule particulars of the additional property set out in the said affidavit.

(3) Where the Commissioner has granted exemption to an executor under section 14A (1)- (a) there shall be annexed to the probate or letters of administration the certificate of exemption issued to the executor under section 14A (2); and (b) the penalties referred to in subsection (1) of this section shall apply to any person who, without lawful authority or reasonable excuse, in any way deals with any property- (i) belonging to a deceased; or (ii) held by a deceased in trust for another person, which was not disclosed to the Commissioner under section 14A (1). (Added 21 of 1972 s. 6) 24. Penalties for intermeddling (1) Subject to subsection (3A), every person who, being neither the executor appointed by the will of the deceased nor (in the case of an intestacy) the person entitled in priority to the administration of the estate of the deceased, without lawful authority or excuse or without first delivering to the Commissioner accounts of the estate of the deceased as required by section 14, takes possession of or in any way administers any part of the estate of a deceased person, or any part of the income of any part of such estate, shall be liable to a penalty of $1,000 and shall also be liable to a further penalty equal to 3 times the amount of the estate duty at the rate set out in the applicable Schedule payable upon the whole estate of the deceased. (Amended 21 of 1972 s. 7) (2) Subject to subsection (3A), every person who, being the executor appointed by the will of the deceased or (in the case of an intestacy) the person entitled in priority to the administration of the estate of the deceased, takes possession of or in any way administers any part of the estate of a deceased person or any part of the income of any part of such estate, within 6 months of the death of the deceased, and fails within the said period of 6 months to deliver to the Commissioner accounts of the estate of the deceased as required by section 14, shall be liable to a penalty of $1,000, and shall also be liable to a further penalty equal to 3 times the amount of the estate duty at the rate set out in the applicable Schedule payable upon the whole estate of the deceased.

(Amended 21 of 1972 s. 7) (3) Subject to subsection (3A), every person who, being the executor appointed by the will of the deceased or (in the case of an intestacy) the person entitled in priority to the administration of the estate of the deceased, takes possession of or in any way administers any part of the estate of a deceased person, or any part income of any part of such estate, after the expiration of 6 months from the death of the deceased, without first delivering to the Commissioner accounts of the estate of the deceased as required by section 14, shall be liable to a penalty of $1,000 and shall also be liable to a further penalty equal to 3 times the amount of estate duty at the rate set out in the applicable Schedule payable on the whole estate of the deceased. (Amended 21 of 1972 s. 7) (3A) Subsections (1), (2) and (3) shall not apply in any case where the Commissioner has granted exemption to an executor under section 14A (1).
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