HONG KONG, Feb. 11 (Xinhuanet) -- Hong Kong began to abolish estate duty as of Saturday, with the aim to attract more local and overseas investment in Hong Kong.
According to a spokesman of the Financial Services and Treasury Bureau, the enact of the law will help Hong Kong to increase its competitiveness as an international financial center.
Hong Kong's Legislative Council adopted on Nov. 2, 2005 the Revenue (Abolition of Estate Duty) Bill 2005 which seeks to amend the Estate Duty Ordinance to implement the proposal announced in the 2005-06 Budget to abolish estate duty.
It is estimated that the proposal to abolish estate duty will cost the government annual revenue of about 1.5 billion HK dollars(194 million U.S. dollars).
However, the Hong Kong Special Administrative Region (HKSAR) government estimated that he abolition would help promote trading in Hong Kong's financial markets, and contribute additional revenue from stamp duty and other taxes.
The HKSAR government also believes that as asset management services can foster growth in other financial activities and a series of high-value added professional services, other industries will also benefit indirectly. The community, and hence members of the public, will enjoy the subsequent economic benefits.
Hong Kong imposed estate duty as high as 15 percent to any individual who passes away with a property (real estate, stocks and luxury goods) valued about 7.5 million HK dollars (967,742 U.S.dollars).