Hong Kong Ordinances

STAMP DUTY ORDINANCE - SECT 28

Stamp duty chargeable in case of conveyance or transfer in contemplation of sale or subject to power of revocation etc.

(1) Subject to this section, any instrument whereby property is conveyed or
transferred to any person in contemplation of a sale of that property shall be
treated as a conveyance or transfer operating as a voluntary disposition inter
vivos of that property.

(2) If on a claim made to the Collector not later than 2 years after the
making or execution of an instrument to which subsection (1) applies, it is
shown to his satisfaction-

   (a)  that the sale in contemplation of which the instrument was made or
        executed has not taken place and the property has been re-conveyed or
        re-transferred to the person from whom it was conveyed or transferred
        or to a person to whom his rights have been transmitted on death or
        bankruptcy; or

   (b)  that the sale has taken place for a consideration which is less than
        the value by reference to which stamp duty was paid in respect of the
        instrument by virtue of this section, the Collector shall repay the
        stamp duty paid by virtue of this section, in a case falling under
        paragraph (a), so far as it exceeds the stamp duty which would have
        been payable apart from this section and, in a case falling under
        paragraph (b), so far as it exceeds the stamp duty which would have
        been payable if the instrument had been stamped in accordance with
        subsection (1) in respect of a value equal to the consideration in
        question: Provided that, in a case falling under the said paragraph
        (b), stamp duty shall not be repayable if it appears to the Collector
        that the circumstances are such that a conveyance or transfer on the
        sale in question would have been chargeable with stamp duty by virtue
        of section  27 (4).

(3) Subsections (1) and (2) shall apply whether or not an instrument conveys
or transfers other property in addition to the property in contemplation of
the sale of which it is made or executed, but those subsections shall not
affect the stamp duty chargeable in respect of that other property.

(4) For the purposes of section 27 and this section, the value of property
conveyed or transferred by an instrument chargeable with stamp  duty in
accordance with either of those provisions shall be determined without regard
to-

   (a)  any power (whether or not contained in the instrument) on the exercise
        of which the property, or any part of or any interest in the property,
        may be re-vested in the person from whom it was conveyed or
        transferred or in any person on his behalf;

   (b)  any annuity reserved out of the property or any part of it, or any
        life or other interest so reserved, being an interest which is subject
        to forfeiture, but if on a claim made to the Collector not later than
        2 years after the making or execution of the instrument it is shown to
        his satisfaction that any such power as is mentioned in paragraph (a)
        has been exercised in relation to the property and the property or any
        property representing it has been re-conveyed or re-transferred in
        whole or in part in consequence of that exercise the Collector shall
        repay the stamp duty paid by virtue of this subsection, in a case
        where the whole of such property has been so re-conveyed or
        re-transferred, so far as it exceeds the stamp duty which would have
        been payable apart from this subsection and, in any other case, so far
        as it exceeds the stamp duty which would have been payable if the
        instrument had operated to convey or transfer only such property as is
        not so re-conveyed or re-transferred.