Tax Planning Case Study

Client Background – Mr. Ho

Age: 46
Occupation: Doctor
Number of children: 3
Property: Bought at HKD6,000,000. Current market value at HKD12,000,000.
Assets: Cash, time Deposits and funds
Goal: Family immigration to UK

Solutions

Mr. Ho was an alumni from the UK college, therefore he always hoped that his children also study back there. Recently he planned to immigrate to the UK with his family. As he was aware that there were a lot of pricy taxes charge in the UK, he found on the internet that the taxes rate was much higher than that in Hong Kong: Income Tax reached max. 45%, Capital Gains Tax reached max. 28% and Estate Duty could be max. 40%. Mr. Ho was concerned that after immigration, his assets would face a big depreciation. Not hoping to leave the heavy burden of taxes to his children, he reached us before he moved.

We referred a professional consultant to Mr. Ho, who explained a well planned tax planning and arrangement, which was legal not avoidance, could help lessen his amount of tax pay.

Through consultation, Mr. Ho realized that no matter salary, raise in property value, stock gain, rental income from Hong Kong property, dividend and inheritance were taxable. For example, for the flat he bought at HKD6,000,000, and currently valued at HKD12,000,000, the HKD6,000,000 gain was taxable. If Mr. Ho did not plan to hold the flat for the long-term, it was suggested he should sell it. Or otherwise, he should arrange a repurchase or asset restructure for a new “cost” to save his Capital Gain Tax. After the consultation, Mr. Ho smoothly re-arrange his assets for a more efficient succession.

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