SDO s45 Transfer between associated bodies corporate is section 45 of Hong Kong Stamp Duty Ordinance Cap.117

Hong Kong Stamp Duty Ordinance Cap.117

The Stamp Duty Ordinance is one of Hong Kong Ordinances which regulates the law of stamp duty.-The Most Used Sections:Section 2 - Interpretation The Stamp Duty Ordinance is one of Hong Kong Ordinances which regulates the law of stamp duty.-The Most Used Sections:Section 2 - Interpretation The Stamp...

 (In short, HK SDO). It regulates the Hong Kong

Hong Kong

Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...

 Stamp Duty

Stamp duty

Stamp duty is a tax that is levied on documents. Historically, this included the majority of legal documents such as cheques, receipts, military commissions, marriage licences and land transactions. A physical stamp had to be attached to or impressed upon the document to denote that stamp duty...

 exemption for certain property

Property

Property is any physical or intangible entity that is owned by a person or jointly by a group of people or a legal entity like a corporation...

 transfer between associated corporations, (intra group).

HK SDO section 45 exemption does apply to the following transactions:

1. Conveyance on sale of immovable property
   Immovable property
   Immovable property is an immovable object, an item of property that cannot be moved without destroying or altering it - property that is fixed to the Earth, such as land or a house. In the United States it is also commercially and legally known as real estate and in Britain as property...
   
   ;
2. Agreement for sale of residential property;
3. Transfer of Hong Kong stock
   Stock
   The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
   
   .

Therefore, HK SDO s45 exemption does not apply to leasing

Leasing

Leasing is a process by which a firm can obtain the use of a certain fixed assets for which it must pay a series of contractual, periodic, tax deductible payments....

 transaction.

Associated bodies

The said associated bodies are not same as the associate company

Associate

Associate may refer to:* A business valuation concept.* A title used by some companies instead of employee.* A title used to signify an independent person working as if directly employed by the company of which they are an associate...

 defined in accounting. The associated bodies mentioned in HK SDO mean:

1. One is directly or indirectly the beneficial owner of not less than 90% of the other; or
2. A third party corporate is owner of not less than 90% of the issued share capital of each company. An example is the relationship of a holding company
   Holding company
   A holding company is a company or firm that owns other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself; rather, its purpose is to own shares of other companies. Holding companies allow the reduction of risk for the owners and can allow...
   
    and two subsidiaries.

Corporation, not natural person

HK SDO Section 45(4)(a) states that HK SDO section 45 does not apply to a transaction consideration

Consideration

Consideration is the central concept in the common law of contracts and is required, in most cases, for a contract to be enforceable. Consideration is the price one pays for another's promise. It can take a number of forms: money, property, a promise, the doing of an act, or even refraining from...

 provided or received directly or indirectly by a natural person

Natural person

Variously, in jurisprudence, a natural person is a human being, as opposed to an artificial, legal or juristic person, i.e., an organization that the law treats for some purposes as if it were a person distinct from its members or owner...

other than an associated corporation.

Once ceased to be associated bodies

HK SDO Section 45(4)(c) states that if the above transferor and the transferee have ceased to be associated due to change in % of the issued share capital of the transferee, HK SDO section 45 also does not apply.

Reference links

• Chapter 117 STAMP DUTY ORDINANCE, Section 45 Transfer between associated body corporate