Summary: Despite the abolition of the estate duty in Hong Kong, many residents of Hong Kong are subject to estate duties or inheritance taxes by other countries, where they have investments or are domiciled.

Most people prefer not to think about their own death, naturally enough, but failing to do so and to plan appropriately can be a very expensive business. Not for you because you are dead. It's your family who end up losing out. If you are young, healthy and single, you can stop reading now. If you have a spouse (whom you like) and/or some children, then the following is important.

After the abolition of estate duty in Hong Kong many people mistakenly believed that they no longer needed to consider estate duties or inheritance taxes as they are called in some places. For most wealthy Hong Kong residents that isn't true. Most will have investments outside Hong Kong and frequently those assets will be subjected to "death taxes" by the country in which they are located irrespective of who owns them. Obviously, the older you get, the more important it is to have your affairs in order. But, unhappily, people do die at unexpectedly young ages, so it is never too early to start. So unless you know when you are going to die so can leave planning until nearer that time start now. There is supposedly one way of finding out when you are going to leave this mortal coil. Check out www.deathclock.com and input some simple information about yourself. It will immediately give your exact time and date of death. I don't think it would be wise to rely on this.

To illustrate what I am talking about let’s consider the example of a UK national who is a long term resident of Hong Kong who has:

1. A nice London pad worth BP 2 million.

2. A collection of fine wines stored in London worth BP 150,000

3. A holiday home in Spain worth Euros 3 million

4.

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About the Author Howard Bilton is Chairman of The Sovereign Group. Sovereign’s core business is setting up and managing companies, trusts and other structures to meet the specific personal business needs of clients. Typically these needs would include tax planning, wealth protection, foreign property ownership and facilitating cross-border business.

First Published: Jun 18, 2009