HONG KONG SAR, CHINA Law and Practice Contributed by: Alfred Ip, Hugill & Ip
10. Charitable Planning 10.1 Charitable Giving
Kong Same-Sex Couples Take End-of-Life Planning Into Their Own Hands. 9.3 Cohabitation and Unmarried Couples Hong Kong law provides very limited legal protection for unmarried cohabiting couples, regardless of sexual orientation. Unlike married couples, cohabitants have no automatic right to inherit from each other under the intestacy rules, no statutory right to claim a share of their partner’s property on the breakdown of the relationship, and no automatic entitlement to spousal benefits such as joint tax assessment or public hous - ing rights. On the death of a cohabiting partner, the surviving partner’s primary legal recourse is a claim under the Inheritance (Provision for Family and Dependants) Ordinance (Cap. 481). To succeed, the applicant must prove that they were being maintained, either wholly or substantially, by the deceased immediately before the death. The standard of provision available to a cohabitant is limited to maintenance, principally, what is reasonably required for their financial support, and does not extend to the higher standard applicable to spouses. This is a significant limitation, particularly for long-term cohabiting partners who have made substantial contributions to the household or to the deceased’s business. Given these limitations, proactive legal planning is essential for cohabiting couples. The minimum steps include executing mutual wills, ensuring that any joint - ly owned property is held as joint tenants (so that the survivor takes automatically by right of survivorship), nominating the partner as beneficiary of any pension or life insurance policy, and granting the partner an EPA to manage financial affairs in the event of inca - pacity. As with same-sex couples, a discretionary trust with the cohabiting partner named as the primary ben - eficiary provides the most comprehensive protection, ensuring that the partner’s financial security is not dependent on the vagaries of intestacy law or the outcome of a Cap. 481 claim.
Hong Kong has a long and distinguished tradition of philanthropy, and the legal framework actively encour - ages charitable giving through targeted tax incentives. Under Section 88 of the Inland Revenue Ordinance (Cap. 112), charitable institutions and trusts of a pub - lic character that are established in Hong Kong and are operated exclusively for charitable purposes are exempt from Profits Tax. The Inland Revenue Depart - ment maintains a searchable list of all tax-exempt charities, providing donors with a straightforward means of verifying a charity’s status before making a donation. For individuals and corporations making approved charitable donations to Section 88 charities, the donation is deductible for Salaries Tax or Profits Tax purposes. The deduction is capped at 35% of the donor’s assessable income or assessable profits for the year of assessment. This represents a meaningful tax incentive, particularly for high-income individuals who can reduce their effective tax rate by directing a portion of their income to charitable causes. Dona - tions of property ‒ as opposed to cash ‒ may also be deductible, though the valuation of non-cash dona - tions requires careful documentation. The integration of charitable giving into estate plan - ning is increasingly sophisticated. Charitable bequests in a will, the establishment of charitable trusts, and the creation of donor-advised funds are all mechanisms through which high net worth individuals can leave a lasting philanthropic legacy whilst optimising their tax position during their lifetime and on death. 10.2 Common Charitable Structures The two most common structures for formalised chari - table activity in Hong Kong are the company limited by guarantee and the charitable trust. Each has distinct advantages and is suited to different philanthropic objectives. A company limited by guarantee is a corporate entity in which the members’ liability is limited to a nominal guarantee amount (typically HKD100 or HKD1,000) rather than a shareholding. It provides limited liability
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