INHERITANCE TAX: THE BASICS FOR HONG KONG PERMANENT RESIDENTS RELOCATING TO
WESTERN COUNTRIES

Hong Kong

Estate duty has been abolished, effective from 11 February 2006.  As such, estates of Hong Kong residents who pass away on or after that date are not subject to estate duty (with the exception of properties situated overseas).

Overseas

In general, many Western countries have an inheritance tax regime.

Typically, when a person dies, the net value of their estate (i.e. everything they own less everything they owe) is calculated and, if it is valued at more than a certain threshold, the surplus is taxed at percentages up to 50%.  The value of any gifts that they have made over the previous years may also be taken into account when calculating the value of their estate.   The tax is generally payable out of the deceased’s estate before the beneficiaries of the estate receive their inheritance.

Proposed resource

To potentially mitigate inheritance tax consequences, you could consider setting up a Trust and/or a Will before moving to a Western country.  With respect to the latter, we collaborate with Good Wills [Wills | Good Wills Hong Kong] in putting together a Will that is appropriate for protecting your Hong Kong tax domicile. 

Please contact us on info@kyimtax.com if you would like to engage us for a consultation.