1959-HKRS28-8-26_Part01 — Page 14

(Cap. 159).

12 & 13 Geo.

c. 17, 2107).

3 & 4 Gea. 6, c. 29,

• 380000

Charge on assets of controlled companies.

3 & 4 Gee, $, c. 29, 1. 46 and 9 & 10 Geo. 6, c. 64, s. 47.

Proportion

of assets accruing to deceased.

24

(b) for any right to receive income created in favour

of the company: or

(c) for consideration the value of which to the company was, at the time when the debt was incurred, substantially less than the amount of the debt including any premium thereon,

or in respect of any redeemable loan capital issued by the company:

Provided that a bank licensed to carry on banking business under section 4 of the Banking Ordinance, shall not be deemed to be a loan creditor in respect of any loan capital or debt issued or incurred by the company for money lent by such bank to the company in the ordinary course of the bank's business; "member" includes any person having a share or interest

in the capital or profits of a company;

"relative" has the meaning attributed thereto in section 6A;

and

"relevant time" means any time during the period ending with the death of the deceased and beginning, as respects section 41, three years before his death, and, as respects sections 32, 38 and 42 at the date of the disposition transfer or other transaction or event relevant for the purposes of those sections, or if that disposition transfer or other transaction or event was one of associated operations, at the date of the earliest of those operations.

32. (1) Where a person has made to a company to which this section applies a transfer of any property, other than an interest limited to cease on his death or property which he transferred in a fiduciary capacity, and any benefits accruing to the deceased from the company accrued to him in the three years ending with his death, the assets of the company shall be deemed for the purposes of estate duty to be included in the property passing on his death to an extent determined, in accordance with subsection (2), by reference to the proportion that the aggregate amount of the benefits accruing to the deceased from the company bore to the net profits of the company.

(2) The extent to which the assets of the company are to be deemed to be included as aforesaid shall be the proportion ascertained by comparing the aggregate amount

Ascertain-

ment of total Assels of contratted companies.

Seventh Schedule.

25

of the benefits accruing to the deceased from the company in the last three accounting years with the aggregate amount of the net profits of the company for the said years:

Provided that-

(a) where, in any of the said accounting years, the company sustained a loss, the amount of that loss shall be deducted in ascertaining the said aggre- gate net profits of the company;

(6) where the company came into existence in the last but one, or in the last, of the said accounting years. the references in this subsection to the said accounting years shall be construed as references to the last two or the last, of those years, as the case may be.

(3) The assets of the company which are deemed to be included in the property passing on the death of the deceased by virtue of this section shall include any assets thereof which have been disposed of or distributed by the company at any time between the beginning of the first of the accounting years aforesaid and the death of the deceased, either-

(a) in or towards satisfaction of rights attaching to shares in or debentures of the company; or

(b) otherwise howsoever except as follows, that is to say, by way of sale for full consideration in money or money's worth received by the company for its own use and benefit, or in or towards discharge of taxes or rates or other liability imposed by or under any enactment, or in or towards discharge of a line or penalty or of a liability for tort in- curred without collusion with the injured party. including assets which have been so disposed of or distributed in a winding up, whether continuing at or completed before the death:

Provided that this subsection shall not apply to assets disposed of or distributed by way of payments of dividends of amounts not exceeding in the aggregate, as respects payments made in any accounting year or in the period between the end of the last accounting year and the death of the deceased, the amount of the profits of the company for that year or period.

(4) The provisions contained in the Seventh Schedule shall have effect for the purpose of supplementing and interpreting this section, section 31 and sections 33 to 42 inclusive.