SDO s45 Transfer between associated bodies corporate
SDO s45 Transfer between associated bodies corporate is the section 45 of Hong Kong Stamp Duty Ordinance Cap.117 (In short, HK SDO). It regulates the Hong Kong Stamp Duty exemption for certain property transfer between associated corporations, (intra group).
HK SDO section 45 exemption does apply to the following transactions:
- Conveyance on sale of immovable property;
- Agreement for sale of residential property;
- Transfer of Hong Kong STOCK.
Therefore, HK SDO s45 exemption does not apply to leasing transaction.
Associated bodies
The said associated bodies are not same as the associate company defined in accounting. The associated bodies mentioned in HK SDO mean:
- One is directly or indirectly the beneficial owner of not less than 90% of the other; or
- A 3rd party corporate is owner of not less than 90% of the issued share capital of each companies. The example is the relationship of holding company and two subsidaries.
Corporation, not NATURAL person
HK SDO Section 45(4)(a) states that the transaction consideration provided or received directly or indirectly by a natural person other than an associated corporation does not apply the HK SDO section 45.
Once ceased to be associated bodies
HK SDO Section 45(4)(c) states that the above transferor and the transferee once ceased to be associated due to change in % of the issued share capital of the transfee, the HK SDO section 45 also does not apply.