TNAG-1641-FCO40-2288-Budget-of-Hong-Kong-1987 — Page 65

refinancing arrangements which are variations on "Myer" schemes,

so named after an Australian case which has been given wide

publicity in professional circles. Briefly, these arrangements

seek to convert an income flow, such as interest on a loan which

is assessable to profits tax, into a non-taxable capital receipt by assigning the income flow to another person without assigning

the underlying asset. The arrangements may also involve efforts

to give income an off-shore source.

138.

It is possible that the general anti-avoidance

provisions introduced last year may be effective in negating the

tax benefit sought from these arrangements. Certainly, the

Commissioner of Inland Revenue will challenge cases where he

considers that the purpose of any arrangement falls within the

terms of the general anti-avoidance provisions. However,

because the amount of revenue capable of being put at risk is so

large and since it has always been the Government's policy

implement specific legislation to counter specific tax-avoidance

schemes, I propose, subject to the advice of the Executive Council, to introduce legislation aimed specifically

asset refinancing arrangements. I further propose

legislation should apply to arrangements entered into after

today.

to

at at these

that such

IMPLEMENTATION

139.

My proposals for dutiable commodities, visa and travel documents and vehicle and driving licence fees were the subject

of Public Revenue Protection Orders signed by Your Excellency this morning. The increase in the business registration fee

will, subject to the approval of this Council, take effect on

1 April 1987. Other increases in fees and charges will be

brought forward during the year as the relevant reviews are

completed. During the current session bills will be introduced this Council to give effect to my proposals on estate duty

and tax concessions.

into

44

/SUMMING