Private Client Services
There are many different ways in which people can make charitable donations. However, for the more serious philanthropists who wish to have greater control over their donations, choices are rather limited. Setting up a charitable trust is one of the most popular options, as it provides a legally valid framework for effective, targeted charitable donations in a tax-efficient manner.
A charitable trust is similar to other types of trust. A trust is a legal arrangement whereby one person (the settlor) transfers his/her assets to another person or a body corporate (the trustee), who holds and manages the assets (the trust property) for the benefit of other persons (the beneficiaries). For a charitable trust, the intended beneficiary is a charity or charitable causes.
In Hong Kong, charitable donations generally afford the donors tax exemptions. A properly established charitable trust may also be exempt from tax in respect of the profits generated from either its business activities or investments under section 88 of the Inland Revenue Ordinance. In order to be exempted, one has to apply to the Inland Revenue Department and fulfill certain conditions. We assist clients in the establishment of a trust that will be approved for Charitable purposes.