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“Bought and Sold Notes” (also call Contract notes) must be submitted for stamping within two days (30 days if the sale takes place outside Hong Kong) of their execution. Ad valorem stamp duty is levied on each contract note (i.e. both the bought note and the sold note) at the amount whichever is the higher of the consideration paid or the value of the shares transferred.

“Transfer as a gift” must be submitted for stamping within one week (30 days if the sale takes place outside Hong Kong) of their execution. Ad valorem stamp duty is levied on each Instrument of Transfer as Gift at the the value of the shares transferred.

asked by (9.9k points)

3 Answers

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DIPN for Stamp Duty (source: https://www.ird.gov.hk/eng/ppr/dip.htm#cedoipn):

  1. Stamping of agreements for sale and purchase of immovable property [issed in November 2018]
  2. Relief for stock borrowing and lending transactions [issued in February 2011]
  3. Deemed consideration under section 24 of the Stamp Duty Ordinance, Cap.117 [issued in September 1998]
  4. Deemed sale and purchase under section 19(1E) of the Stamp Duty Ordinance, Cap.117  [issued in 25 January 2000]
  5. Special Stamp Duty  [issued in July 2014]
  6. Alternative Bond Schemes  [issued in August 2014]
  7. Buyer's Stamp Duty  [issued in July 2014]
  8. Ad Valorem Stamp Duty  [issued in November 2018]

IRD's interpretation for 印花稅條例第 29/29G 條 一系列交易: https://www.ird.gov.hk/chi/pdf/soa_pn04b.pdf?tdsourcetag=s_pcqq_aiomsg

PS 1: for Company that 

  • not yet take any business activities, 
  • having huge share capital amount, say 100 million Hong Kong dollars, which wasn't paid up, i.e., 100 million Hong Kong dollars still due from shareholder.

to prevent Stamp duty officer stamp the share transfer of the Company based on share capital amount HKD 100 million, should submit management accounts shown that the net asset value of the Company is zero and an loan assignment that the HKD 100 million loan was shifted to new shareholder. Without that management account and loan assignment, the Stamp Duty may be calculated based on HKD 100 million. 

May first time submit, assessor assessed on HKD 100 million, you can try to submit 2nd time, another assessor may assess on zero net asset of the Company.

Reference 1: (also see details below) Section 24 Stamp duty chargeable where conveyance etc. is in consideration of debt etc. of Stamp Duty ordinance Cap. 117)

(Reference 2: In the case of unquoted shares, the value of the stock has to be ascertained from the latest accounts of the company in respect of which share(s) therein is/are to be transferred. Paragraph 2 of link: https://www.ird.gov.hk/eng/pdf/pn04a.pdf

PS 2: IRD Stamp Duty department doesn't keep copies of documents stamped. You can't recover the documents from them, don't miss the original.

answered by (9.9k points)

loan assignment sample template:

The ABC Company ("Creditor") owes to GHJ Company ("Assignor") $ XXX ("the debt") at (year end).

The Assignor hereby assign his entitlement and rights of the whole amount of the debt to MNV Company ("Assignee"), [to set-off Assignor's loan with Assignee].

This letter is signed by all parties concerned.

Signed dated DD MMMM YYYY

_______________      

Assignor GHJ Company

_______________

Assignee MNV Company

_______________

Creditor ABC Company

* If more than one assignee, state % and $$.

Section 24 Stamp duty chargeable where conveyance etc. is in consideration of debt etc.

  • (1) In the case of a conveyance on sale or any transaction whereby a beneficial interest in Hong Kong stock passes, where the conveyance or transaction is in consideration, wholly or in part, of any debt due to the transferee or is subject either certainly or contingently to the payment or transfer of any money or stock, whether or not being or constituting a charge or incumbrance upon the property or interest so conveyed or passing, the debt, money or stock is to be deemed the whole or part, as the case may be, of the consideration by reference to which the conveyance or contract note is chargeable with stamp duty.
  • (2) Where a conveyance on sale or transaction whereby a beneficial interest in any Hong Kong stock passes is in consideration wholly or in part of any debt due to the transferee and, apart from this subsection, the consideration by reference to which the conveyance or contract note would be chargeable with stamp duty would exceed the value of the property conveyed or beneficial interest passing, that consideration shall be treated as reduced to that value; and the conveyance or contract note shall not be duly stamped unless it is stamped under section 13(3).
  • (3) Where, by virtue of or in connection with any transaction referred to in subsection (1) whereby a beneficial interest in any shares in a body corporate passes, any liability is incurred by the transferee in respect of any indebtedness of the body corporate, the transaction shall, in addition to any other payment of money or transfer of shares to which it is subject, be deemed to be subject to the payment of an amount of money equal to the amount of such indebtedness.
0 votes

Share transfer for deceased person: need Letters of administration of High Court:

The stamp duty will be "No Ad Valorem Duty payable":

answered by (9.9k points)
0 votes

A story for reducing Stamp Duty for "Second" property:

Caution points for the story:

1, The transfer pricing of the "first" property transferred to "close relative" need to be at its market price. Of course, statistically there is 5% - 10% statistical confidence range.

answered by (9.9k points)
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