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Trusts in Kowloon, Hong Kong are legal arrangements in which one party, known as the trustee, holds the legal title to property or assets for the benefit of another person or group, known as the beneficiaries. Trusts can be a highly effective way to preserve wealth, ensure a smooth succession of family assets, and achieve tax efficiency. The Hong Kong Trusts Law, based on English Common law, provides for strong protections of beneficiaries’ rights and a high degree of confidentiality, making it a very attractive jurisdiction for setting up trusts.
Trusts can be complex, both in terms of their structure and the laws that govern them. Often, individuals require the assistance of lawyers with expertise in trusts to navigate this complexity. This could be when setting up a trust, when acting as a trustee, when a trust is being dissolved, or if any disputes arise in relation to a trust. Lawyers can provide critical legal advice and assistance to ensure that the trust operates smoothly and that your interests are well represented.
The key aspect of the trust legislation in Hong Kong is the Trustee Ordinance (Cap. 29) and the Perpetuities and Accumulations Ordinance (Cap.257). These laws lay out the specific duties, powers, and responsibilities of trustees, and set forth the rules for the creation, management and termination of trusts. A 2013 amendment has modernized trusts law in Hong Kong, which include no rule against perpetuity, enhancement of trustees’ default powers, statutory control on exemption clause, and others to make it beneficial for individuals and organizations.
Trustees are individuals or corporations appointed to hold and manage trust property for the benefit of the trust’s beneficiaries. They’re bound by laws to act in the best interests of the beneficiaries.
Under the Perpetuities and Accumulations Ordinance, a trust may last for a maximum period of 120 years.
Hong Kong doesn’t impose a tax on distributions of income or capital from a Hong Kong trust to non-resident beneficiaries. Trusts may also be exempt from Hong Kong profits tax in certain cases.
This is a legal document that creates the trust, setting out the terms and conditions and the powers of the trustees. It is generally necessary to have a trust deed to establish a legal trust.
If a trustee fails to perform their duties properly, they may be liable for breach of trust. This could result in the trustee having to compensate the trust or the beneficiaries for any loss, or even be removed as a trustee.
The Hong Kong Trustee Association (HKTA) is a non-profit making organization of trustees which focuses on promoting the Hong Kong trust business, improving trust industry standards and professional education. The Companies Registry and the Inland Revenue Department in Hong Kong also provide information on trusts.
If you need legal assistance with trusts in Kowloon, Hong Kong, it is advisable to seek advice from a legal professional who specializes in trusts and can help you understand your rights and obligations. Legal professionals can guide you through the process of setting up and managing a trust, represent you in any trust disputes, and provide valuable advice on how to use trusts to best meet your personal and financial goals.
