Legislative Council

LC Paper No. LS 5/99-00

Paper for the House Committee Meeting
of the Legislative Council
on 15 October 1999

Legal Service Division Report on
Stamp Duty (Amendment) Bill 1999

Object(s) of the Bill

To amend the Stamp Duty Ordinance (Cap. 117 ) ("the Ordinance") to -

  1. provide that adjudication fee is not payable in respect of certain instruments;

  2. increase the adjudication fee from $20 to $50;

  3. transfer the regulation-making power from the Chief Executive in Council to the Financial Secretary.

LegCo Brief Reference

2. FIN CR 6/2306/91 Pt. 14 issued by the Finance Bureau on 29 September 1999.

Date of First Reading

3. 13 October 1999.


4. Under section 13 of the Ordinance, the Collector of Stamp Duty may, and shall if he is required by any person upon payment of an adjudication fee of $20 to do so, express his opinion with reference to an executed instrument whether it is chargeable with any stamp duty and assess the amount chargeable thereon.

5. Adjudication is usually optional at the election of either the Collector or the taxpayer, but it is mandatory to conduct adjudication on certain types of instruments for revenue protection purposes. These instruments are :

  1. conveyance on sale or contract note whereby a beneficial interest in Hong Kong stock passes is in consideration of a debt of greater value (section 24);

  2. conveyance of immovable property or a transfer of Hong Kong stock operating as a voluntary disposition inter vivos (section 27);

  3. voluntary agreement inter vivos (section 29F);

  4. conveyance on sale where exemption from duty is claimed in respect of an otherwise chargeable agreement for sale entered into between associated body corporates (section 29H);

  5. gift to exempted institutions (section 44);

  6. conveyance on sale conveying a beneficial interest in immovable property or a contract note conveying a beneficial interest in Hong Kong stock from one associated body corporate to another (section 45);

  7. foreclosure order (Note 4 to Head 1(1) and Note 3 to Head 2(3) in the First Schedule).

6. The Bill proposes to abolish the fee charged for mandatory adjudication. It also provides for refund of adjudication fees paid in respect of the instruments set out above if application is made within 2 years after the Collector has expressed his opinion and upon the instrument being stamped.

7. In respect of voluntary adjudication, the Bill proposes to increase the fee from $20 to $50 which, according to the LegCo Brief, is calculated on the basis of full cost recovery. The Financial Secretary may by order revise the fee.

8. The Bill further proposes to transfer the regulation-making power from the Chief Executive in Council to the Financial Secretary.

9. The proposals in the Bill have been put forward in the Stamp Duty (Amendment)(No. 2) Bill 1996 in April 1996. The House Committee of the former Legislative Council decided to form a Bills Committee to study another policy proposed in that Bill. However, there was insufficient time for the Bill to be processed and it lapsed after 30 June 1997.


10. The proposal has been endorsed by the Public Accounts Committee of the former Legislative Council in its Report No. 24 of July 1995 on the Director of Audit's report on the results of value for money audits. Members may refer to paragraph 6 of the LegCo Brief for more details.


11. The Legal Service Division is seeking clarification from the Administration on certain technical points. A further report will be issued when we receive a reply from the Administration.

Prepared by

Wong Sze-man, Bernice
Assistant Legal Adviser
Legislative Council Secretariat
13 October 1999