5.
There followed a long period of consultation within HMG as to how the money should be handled. Informal approaches to the Treasury revealed that if the money was accepted by HMG as a gift it would go straight into the Consolidated Fund and no interest would be paid. The Treasury were, however, prepared to agree with the FCO suggestion that the gift should be held in trust by the British Council and were content for the FCO to proceed on these lines.
6. Sir S K Tang died on 19 June 1986. His will contained no mention of the gift. His widow, who was also his executrix, and his son and daughter have been informed of the proposals for the administration of the money. The executrix has said that she is quite content for the handling of the money to be left entirely in the hands of HMG both in respect of the educational and medical aspects.
1.
The money appears to have remained on deposit until November 1987, when, apparently with FCO approval, it was decided that contributions should be made from the Tang bequest to a Scholarship scheme run jointly by HMG and the Hong Kong Government. We are seeking the view of lawyers in Hong Kong about the propriety of these disbursements, which further complicate an already difficult matter. The details, so far as known to me, are in Mr Lai's letter of 27 September to Mr Stone.
8.
Applicable Law
This whole transaction took place in Hong Kong. Accordingly, I think the validity of the donation and the question of whether the money is now held in trust or not should probably be decided in the first place by reference to the law of Hong Kong. We are seeking confirmation from lawyers in Hong Kong that a valid trust exists in the law of Hong Kong. We have asked for a legal view on what the trust purposes are, on who the trustees are, what their powers are, and on how such a trust could be transferred to England and Wales.
9. Action
I realise that your advice will depend on what views we receive from lawyers in Hong Kong. However, there is no doubt that a formal trust arrangement has to be set up, as soon as possible, clearly indicating the purposes for which the money can be used, the trustees who are to administer the trust and making the usual technical administrative provisions for replacement of trustees, powers of investment, distribution of the fund, etc. The tax status of the present arrangement and any future arrangements will also need to be looked at. Several points have guided our thinking on the future running of the Trust. First, we would much prefer that the trust should be set up in England and administered here. 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.
Page
No comments yet.
Private notes are available after approval.