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In: Finance

Hi, can you answer this question in more detail? Subject: Hong Kong Taxation and Estate Planning...

Hi, can you answer this question in more detail?

Subject: Hong Kong Taxation and Estate Planning

Q2. D

Trust is an important tool in estate planning. It is a mechanism to separate the power of execution over a property from the beneficial owner of a property. Critically analyze the six advantages of trust.

(Words: 700 - Need to be original, Don't direct copy )

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Solution:-

Introduction

Trust in Estate Planning

Both fixed and discretionary trusts can be established under the hong kong law.Discretionary trusts are widely used used for estate planning,succession planning ,asset protection ,privacy and international tax planning purposes.One of the advantage of hong kong trus is the settlor shall not required to be a resident in hong kong and also not required minimum trust fund and trust requirement for registration of trust under hong kong law.

Advantages of Trust

1.Under hong kong law there is no minimum trust fund and trust equipment is required for registration of trust .

2.The settler can be a non resident in hong kong can register trust.That mean there is mandatory requirement that the settler shall be a resident in hing kong

3.There is no maximum trust period for trust under hong kong law.that means if the trust instruments not provided the period of limit ,The trust limit shall be limitless.

4.Discretionary assets are used to protect assets,limit liability ,distribute income and minimize tax.

5.The trustee can control the distribution of income /assets to the beneficiaries in accordance with the trust instruments.

6.This trusts gives flexibility with opportunities for income splitting and optimising tax benefits.


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