Hong Kong Ordinances

ESTATE DUTY ORDINANCE - SECT 3

Interpretation

Caution: This is a past version. See the current version here.

Adaptation amendments retroactively made - see 12 of 1999 s. 3

(1) In this Ordinance, unless the context otherwise requires- "account"
(遺產呈報表) means an account of the particulars and value of the estate
of a deceased person in such form as may be prescribed by the Secretary for
the Treasury, and verified by affidavit; (Amended 27 of 1996 s. 2) "affidavit
for the Commissioner" (遺產申報誓章) means an affidavit in such form as
may be prescribed by the Secretary for the Treasury verifying the particulars
and value of the estate of a deceased person; (Amended 27 of 1996 s. 2)
"applicable Part of Schedule 1" (附表1適用部分) means-

   (a)  in the case of persons dying before 27 February 1931, Part 1 of
        Schedule 1;

   (b)  in the case of persons dying on or after the date shown in column 1 of
        the following table and before the date shown in column 2, the Part of
        Schedule 1 shown in column 3; and

   (c)  in the case of persons dying on or after the last date shown in column
        1 of the following table, the last Part of Schedule 1 shown in column
        3-

TABLE

Date of Death

Applicable Part of
On or after And before Schedule 1 27 February 1931 1 July 1936 Part 2 1 July
1936 1 April 1941 Part 3 1 April 1941 1 April 1948 Part 4 1 April 1948 1
February 1959 Part 5 1 February 1959 1 January 1963 Part 6 1 January 1963 1
April 1967 Part 7 1 April 1967 1 April 1970 Part 8 1 April 1970 1 April 1972
Part 9 1 April 1972 1 April 1974 Part 10 1 April 1974 11 June 1976 Part 11 11
June 1976 3 June 1977 Part 12 3 June 1977 11 July 1980 Part 13 11 July 1980 29
May 1981 Part 14 29 May 1981 4 June 1982 Part 15 4 June 1982 1 April 1987 Part
16 1 April 1987 1 April 1990 Part 17 1 April 1990 1 April 1993 Part 18 1 April
1993 1 April 1994 Part 19 1 April 1994 1 April 1995 Part 20 1 April 1995 1
April 1996 Part 21 1 April 1996 1 April 1997 Part 22 1 April 1997 Part 23;
(Replaced 27 of 1996 s. 2. Amended 44 of 1997 s. 2) "assets" (資產) includes
goodwill; "associated operations" (相聯行動) 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" (平均率) 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" (署長) means such person as the Chief Executive may
        appoint as Commissioner for the purpose of this Ordinance; (Amended 21
        of 1972 s. 2; 12 of 1999 s. 3) "company" (公司) includes any body
        corporate, wheresoever incorporated; "debenture" (債權證) 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" (產權處置) 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" (經分派資產) 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"
        (分派價值) 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" (股息) 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" (遺產稅) means duty
        chargeable under this Ordinance; "executor" (遺囑執行人) 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" (產權負擔) includes mortgage
        and terminable charge; "interest in expectancy" (預期權益)
        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" (成員) 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" (高級人員)
        means, in relation to a company, any person who exercises the
        functions of a director, manager, secretary or liquidator of the
        company; "payment" (繳付、付款) 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" (按期付款) 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;
        "power" (權力) 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;
        "property" (財產) 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" (去世時轉移的財產) 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" (去世時) includes "at a period
        ascertainable only by reference to the death"
        (在僅可依據該宗死亡才可以確定的一段期間);
        "settlement" (授產安排、授產契) means any non-testamentary
        disposition in writing, whether made voluntarily or upon a good or
        valuable consideration other 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"
        (聯合交易所) 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" (一般權力) 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" (財產)
        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"
        (財產) 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 interest;
        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 this 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"
        (繳付、付款) in subsection (1)) shall include a reference to a
        payment of money, and the expressions "disposition" (產權處置) and
        "value" (價 值) 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) "account" (遺產呈報表) "affidavit for the Commissioner"
        (遺產申報誓章) "applicable Part of Schedule 1"
        (附表1適用部分) "assets" (資產) "associated operations"
        (相聯行動 "average rate" (平均率) "Commissioner" (署長)
        "company" (公司) "debenture" (債權證) "disposition"
        (產權處置) "distributed assets" (經分派資產) "value of the
        distribution" (分派價值) "dividend" (股息) "estate duty"
        (遺產稅) "executor" (遺囑執行人) "incumbrance" (產權負擔)
        "interest in expectancy" (預期權益) "member" (成員) "officer"
        (高級人員) "payment" (繳付、付款) "periodical payment"
        (按期付款) "power" (權力) "property" (財產) "property passing
        on the death" (去世時轉移的財產) "on the death" (去世時)
        "settlement" (授產安排、授產契) "Unified Exchange"
        (聯合交易所) "general power" (一般權力) "value" (價值)