III. Abolition of Estate Duty and the procedures for applying for a Grant of Representation
A brief history of the Estate Duty
Before the abolition of estate duty on 11 th February 2006 , "Estate Duty Clearance" (evidencing the required duty has been paid) needs to be obtained before an application can be made for a Grant of Representation. Estate Duty is charged on the total value of all properties situated in Hong Kong (including all personal assets and real estate) which "pass" (are left behind) or are deemed to pass in connection with a person's death. Simply speaking, the estate duty payable is a percentage of the value of the estate. If you want to know the previous rates of Estate Duty (from 1 April 1996 to 10 February 2006), please visit the Inland Revenue Department's webpage.
Abolition of the Estate Duty
There are three stages in relation to the implementation of the abolition of estate duty.
For deaths before 15 th July 2005 , estate duty remains payable. The applicant for a Grant of Probate or Letters of Administration ("the Applicant") should follow the old practice to obtain estate duty clearance before lodging an application to the High Court for a Grant of Representation.
For deaths between 15 th July 2005 and 10 th February 2006 , the Applicant still needs to follow the old practice to obtain estate duty clearance. Even if the total value of the estate exceeds $7,500,000, only a $100 nominal estate duty will be charged.
For deaths on or after 11th February 2006, the Applicant should follow the new procedure and arrangement which will be described in the following question 1.
(Note: For an application for a Grant of Probate, the deceased should have made a Will. Whilst for a Grant of Letters of Administration, there should be no Will, or no executor has been appointed in the Will. Please go to the relevant question and answer to refresh your memory.)
- What are the new procedures for applying for a Grant of Probate or Letters of Administration?
- If the applicant subsequently finds more assets of the deceased after submitting the documents to the Probate Registry, what should he/she do?
- If the value of the deceased's estate does not exceed $50,000, will the application procedure be different?
- What happen if the value of the estate exceeds $50,000 but does not exceed $150,000?
- How does one avoid intermeddling of the estate (handling the estate without permission) after abolition of the Estate Duty?