1964_ESTATE_DUTY_ORDINANCE — Page 56

1983 Ed.]

Estate Duty

(CAP. 111

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which if exercised would have yielded a majority of the votes capable of being exercised thereon, or if he could have obtained such control by an exercise at that time of a power exercisable by him or with his consent; or

(b) to have powers equivalent to control of a company if he either has the capacity, or could by an exercise of a power exercisable by him or with his consent obtain the capacity, to exercise or to control the exercise of any of the following powers, that is to say, the powers of a board of directors or of a governing director of the company, power to nominate a majority of directors or a governing director thereof, power to veto the appointment of a director thereof, or powers of a like nature.

(4) This section shall not apply to the valuation of shares or Hong Kong debentures of a class which have been dealt with on the Stock Exchange in the ordinary course of business on that exchange and such dealings have been recorded during the year ending with the death of the deceased, and, in making an apportionment under subsection (2)(c) in the case of a company having shares or debentures of such a class, the part of the value of the assets of the company to be apportioned to shares or debentures of that class shall be determined by reference to the prices recorded of such dealings.

(5) Control of a company which a person had in a fiduciary capacity shall be disregarded for the purposes of this section but in the cases dealt with in subsection (7), this section shall apply as if the deceased had, within 3 years of his death, had control of the company otherwise than in a fiduciary capacity, but only as to the valuation of the shares in or debentures of the company as respects which one of the conditions contained in paragraph (a) or (b) or the proviso hereto is satisfied, namely-

(a) that immediately after the deceased's death a person having control or powers equivalent to control of the company, either alone or in conjunction with his relatives, has a beneficial interest in possession in the shares or debentures;

(b) that immediately before and after the death the shares or debentures are held by the trustees of some trust who then have control of the company by virtue of shares in or debentures of the company held by them as such trustees, notwithstanding the fact that such trustees had control in a fiduciary capacity:

Provided that, in the case of shares or debentures falling to be valued on the death by virtue of a gift inter vivos made by the deceased, or by virtue of a disposition or determination, in relation to which subsection (1)(h) and subsection (2) of section 6 have effect, of an interest limited to cease on the death, the above conditions shall not apply, and the conditions shall be that immediately after the death or at any previous time since the gift, or since the disposition or determination, as the case may be, the donee, or the person for the time being entitled to the interest, either alone or in conjunction with his relatives, has control or powers equivalent to control of the company.

1940 c. 29. s. 35(4)

1954 c. 44. ss. 29(1) & (5) & 31(2)

1954 c. 44. s. 31(2)