Estate Duty
131.
I have two concessions relating to estate duty.
Members will recall that in 1982, in recognition of rising asset
values, the estate duty exemption limit was raised to
$2 million, and the rate of duty scaled from 10% to 18% on
estates between $2 million and over $4 million. To reduce the
inflationary element inherent in the rise in values in recent years, I propose to replace the present schedule of rates with a new schedule scaled from 6% on estates between $2 million and
$2.5 million to 18%
estates over $5 million (52).
on
Additionally, I propose that the duty free limit on gifts be
increased from $50,000 to $100,000 to take account of
inflation (53).
132.
The cost to the revenue of these two proposals will be approximately $25 million both in 1987-88 and in subsequent
years.
"Time Apportionment" Basis of Taxation
133.
In the area of tax legislation there is always some tidying up to be done either on grounds of equity or to improve
the administration of the system. In recent years the assessment to salaries tax of employees who render services both within and outside Hong Kong has been a growing area of dispute
between the Inland Revenue Department and taxpayers. These disputes, which
which are commonly referred to as "time apportionment"
(52)
On estates between
$2,000,001 and $2,500,000 $2,500,001 and $3,000,000
6응
8%/%
$3,000,001 and $3,500,000
10%
$3,500,001 and $4,000,000
12%
$4,000,001 and $4,500,000
14%
$4,500,001 and $5,000,000
16%
$5,000,001 and above
18%
(53)
Under the first proviso to section 6 (1) (c) of the Estate Duty Ordinance.
41
/cases