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March 08, 2005
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Death and taxes in Hong Kong
TCS discusses the potential abolition of Hong Kong's estate duty. A few problems with the article. Firstly Hong Kong does not have a pure flat tax. Secondly today's SCMP reports the Government will keep the duty for the time being. That aside, the article is correct - estate taxes are easily avoided by the rich and is a form of double taxation, as the "estate" was created with income that has already been taxed. It is not worth the samll amount of revenue it raises. Back to the SCMP: Estate duty is levied on assets based in Hong Kong, including property, bank accounts and equity. Exempting accounts and equity from the duty would allay foreign investors' concerns, Mr Lui said, and would cost the government only $550 million, which is "not too big a giveaway". The flipside of the argument is that removing the duty may adversely affect those employed in the tax advisory and trust industry.I'd put that flipside firmly in the advantages column. posted by Simon on 03.08.05 at 09:35 AM in the
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