TNAG-1981-FCO40-2814-UK-Hong-Kong-Scholarship-Scheme-donation-to-the-UK-Governme-1989 — Page 152

Reference

ничку

administrative provisions for replacement of trustees, powers of investment, distribution of the fund, etc. tax status of the present arrangement and any future arrangements will also need to be looked at.

The

12. The money is presently held on trust in Hong Kong for two purposes :

one third of it is to be used to set up a fund the interest from which is to benefit Cancer Research, and the remainder is to set up a fund which is to provide grants for Hong Kong students in the UK. I am no expert on the administration of trusts, but it seems to me that the most straight forward way to proceed now would be for the present trustee (ie whoever has title to the money in the Hong Kong account) to create two separate trusts, one to fulfil each of these purposes. This could I think be done by a formal declaration of trust, or by two such declarations, one in favour of(say) the Imperiat Cancer Research Institute, and one to the trustees of the new fund to benefit Hong Kong students.

13. In creating these two trusts, I think we should be guided by the following principles:-

(1) The trusts should be governed by the law of England, and this should be made quite clear in the constitutive deeds. I do not think this is unreasonable; even if the "proper law" of the present trust is Hong Kong law, the money was paid so that HMG could administer it for charitable purposes in the UK. English law provides a highly developed system of dealing with charitable trusts, and it would be more convenient for us from several points of view if the trust was subject to English law.

(2) Secondly, the trust has to be capable of operating after 1997. It cannot therefore, in my view, be tied too closely to the present arrangements in the Colony. I would suggest for example that it would be unwise to involve officials from the present Hong Kong Government as trustees on an ex officie basis, and I think it would be better, so far as possible, to transfer the whole administration of the trust to people in the UK, who are independent of HMG and HKG.

(3)

Third, it would be undesirable for FCO officials (HK Department, Legal Advisers) to become involved in the day to day administration of either of the trusts.

(4) We need expert guidance on how the trust should be set up and what formal steps now require to be taken.

14.

Charity Commissioners

Accordingly, I think our first step should be to contact the

CODE 18-77

IM2ADL