TNAG-1981-FCO40-2814-UK-Hong-Kong-Scholarship-Scheme-donation-to-the-UK-Governme-1989 — Page 111

SIPAAD

Reference....

251

нко 28611

Mr Macleod

Legal Advisers

SIR S K TANGS DONATION

1.

2.

Thank you for your minute of 28 September.

I have now had a reply to my letter to Hong Kong Government on this, and I attach a copy.

3. We shall clearly at some stage need to consult the Charity Commissioners on the repatriation of the funds to the UK. My main concern is to arrange for the Cancer Research Institute to receive their amount quickly and to make sure that the disbursements for the UK/HK Scholarships Fund are properly controlled and organised. But I am by no means convinced that the quickest way to do this is to try and establish a Trust in the UK now.

4.

If it is possible, both legally and from a tax advantageous point of view, I would suggest the following:

(a) HKG to establish a Trust in Hong Kong to ensure the legal status of the donation there. This would lay down that:

and a representative

(i) one third of the principle should go to the Cancer Research Institute as soon as possible;

(ii) two thirds of the principle plus all the accrued interest should go towards grants for Hong Kong students, with only accrued interest being drawn down;

(iii) for the time being the grants under (b) would be made on the advice of the UK-HK Scholarship Committee;

(iv) the Trustees under (a) should be a representative of the FCO; a representative of the HKG) with the FCO

of the British Council, representative having power of veto;

5.

(v) that the administration should be done by HKG at cost to the Trust; and

(vi) the Trustees would would have the power to make over the amounts under (b) to a third party so that a charitable Trust could be established in the UK in due

course.

no

This could all be done quickly, in my view. We could then work out the Trust details here. Frankly I am not happy with the British Council's demands and the fact that they seem to see this as a good excuse to charge some administration against the fund. I do not anticipate that being worked out overnight.

CODE 18-77