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Declaration of Trust in Hong Kong

Declaration of Trust in Hong Kong

A Declaration of Trust in Hong Kong is a legal document that clarifies ownership of assets. Here's a breakdown of what it is and how it works:

What it is:

  • A declaration by someone (the Settlor) stating that they hold assets (property, money, etc.) for the benefit of another person (the Beneficiary) or a specific purpose.

How it works:

  • Creates a Trust: The Declaration formalizes a Trust arrangement.

  • Defines Ownership: It clarifies that the Beneficiary has an ownership interest in the assets, even though they may not be the legal owner.

  • Duties of Trustee: The Declaration outlines the responsibilities of the person holding the assets (the Trustee) towards the Beneficiary.

Uses of Declarations of Trust in Hong Kong:

  • Holding Property for Minors: A common use case is for parents to hold property in trust for their minor children until they reach adulthood.

  • Asset Management: It can be used for managing assets for someone who is incapable of managing them themselves.

  • Estate Planning: As part of estate planning to distribute assets according to the Settlor's wishes.

Things to Consider:

  • Legal Advice:  While Declarations of Trust can be written without a lawyer, consulting a lawyer familiar with Hong Kong Trust Law is recommended to ensure it's properly drafted and meets your needs.

  • Formalization:  Although Trusts can be created orally in Hong Kong, a written Declaration is advisable for clarity and avoiding future disputes.

Declarations of Trust and Hong Kong Companies Registry

The Hong Kong Companies Registry (CR) doesn't directly handle Declarations of Trust. Their focus is on company registrations and related services.

Here's what you need to know about Declarations of Trust and the CR:

  • Not Registered: Declarations of Trust themselves are not registered with the CR.

  • Possible Involvement:  If the Trust involves a company registered in Hong Kong, the Trust might be mentioned in the company's records for transparency purposes. This wouldn't be a public record though.

For information on Declarations of Trust, it's best to consult with a lawyer or refer to resources on Trust Law in Hong Kong.

How Bestar can Help

Bestar's expertise lies in accounting and business services. Bestar is able to assist you in:

  • Drafting a Declaration of Trust: Bestar would assist in drafting or registering a Declaration of Trust. 

  • Tax Implications:  Trusts can have tax implications in Hong Kong. Bestar's accounting services could help you understand the potential tax consequences of your Declaration of Trust.

  • Financial Management for Beneficiaries:  If the Trust involves managing assets for a Beneficiary, Bestar's financial management services could be helpful.

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