Old-Money Principles and Family Legacy in Hong Kong: Frequently Asked Questions

A set of behavioural rules shared by families that have passed wealth through at least one generation: treat principal as family capital and spend only income, live on cash flow rather than asset sales, govern the family as an organisation with a charter, stay discreet and long-term, and treat education and values as the most important inheritance. It describes the use of wealth, not its amount or origin.

The figure is widely repeated but weakly sourced. It is attributed to a Williams Group study of about 3,200 families whose methodology has never been published; retellings disagree on sample size, period and definitions, and adviser Jim Grubman has argued in "There is no 70% rule" that it works as a self-fulfilling prophecy (InvestmentNews, 24 February 2025). This site labels it as unverified wherever it appears.

Two directions. NBER working paper w33355 (Kalsi and Ward, 2025) finds from 1850 to 1940 census records that 93% of grandchildren of wealthiest-1% households did not reach the wealthiest 1%. Korom, Lutter and Beckert (2017) find that heirs on the Forbes 400 between 1982 and 2013 were more likely than self-made entrepreneurs to remain listed. Wealth dilutes in most families and persists in the few with institutions.

Yes. The Census and Statistics Department's 2026 edition of Women and Men in Hong Kong gives 2025 life expectancy at birth of 88.7 years for women and 83.3 for men (provisional). Someone planning at 60 has on average more than twenty years ahead, so legacy is a twenty-year project with three generations present, and retirement and medical costs must be funded for longer.

No, for deaths on or after 11 February 2006, when the Revenue (Abolition of Estate Duty) Ordinance 2005 took effect. Transitional estates (deaths from 15 July 2005 to 10 February 2006) pay a nominal HK$100; earlier deaths remain under the Estate Duty Ordinance (Cap. 111). Hong Kong also charges no capital gains, dividend or gift tax. Legacy tools therefore serve liquidity, allocation control and governance rather than tax saving.

The Trust Law (Amendment) Ordinance 2013, in force from 1 December 2013, introduced a statutory duty of care for trustees (section 3A of Cap. 29), confirmed that a settlor reserving investment or asset management powers does not invalidate a trust (section 41X), protected lifetime transfers of movables into Hong Kong-law trusts from foreign forced heirship rules (section 41Y), abolished the rule against perpetuities for new non-charitable trusts (section 3A of Cap. 257) and limited professional trustees' exemption clauses.

Under the Inland Revenue (Amendment) (Tax Concessions for Family-owned Investment Holding Vehicles) Ordinance 2023, in force from 19 May 2023 and applying from the year of assessment beginning 1 April 2022, a family-owned investment holding vehicle managed by an eligible single family office pays 0% profits tax on qualifying transactions if the family holds at least 95% of the beneficial interest, Schedule 16C assets total at least HK$240 million, and the vehicle has at least two full-time employees in Hong Kong and HK$2 million of annual operating expenditure (IRD). This site gives an outline only.

Two things: cash at death that bypasses probate and is paid according to the beneficiary designation, and a guaranteed cash value floor. Under section 13 of the Married Persons Status Ordinance (Cap. 182), a policy expressed to be for the benefit of the insured's spouse or children creates a statutory trust so the proceeds do not form part of the estate. It does not control how beneficiaries use the money, govern a business or educate the next generation.

No. Guaranteed cash value and guaranteed death benefit are contractual; bonuses, dividends and projected totals are non-guaranteed and can fall short of illustrations or be zero. Insurers publish fulfilment ratios on their websites; planning should rest on the guaranteed part only. This site cites no illustrated figures.

A trust transfers legal ownership to the trustee and allocates benefit by deed, so the assets belong to no individual family member. A direct gift makes the child the full owner, exposed to spending, division, creditors and divorce. Only a trust makes "principal belongs to the family" legally true.

Not in that sense. Asset protection works only against creditors arising after the transfer; transfers made while insolvent or facing litigation can be set aside. Hong Kong does not tax trust distributions, but a beneficiary's own jurisdiction may, and may treat the trust as transparent. This site promises no tax outcome.

Five areas: voting and board nomination, dividend policy, transfer restrictions (no transfers outside the family, pre-emption rights, a valuation mechanism), deadlock and exit, and in-law and divorce clauses. Missing any one of them is an entry point for disputes or division.

No, but it is the common source of three binding documents: the shareholders' agreement, the trust letter of wishes and the family office investment policy. A charter drafted by advisers without family participation carries little weight after the founder's death.

The Intestates' Estates Ordinance (Cap. 73) applies a statutory order: with a spouse and children, the spouse takes personal chattels, HK$500,000 and half the residue, the other half held on statutory trust for the children; with a spouse but no children and surviving parents or full siblings, the spouse takes personal chattels, HK$1,000,000 and half the residue (as summarised by the Community Legal Information Centre; the Ordinance governs). The order ignores business control. Probate procedure is outside this site's scope.

Yes, but they must sign the application in person in Hong Kong and complete the Important Facts Statement for Mainland Policyholders (IFS-MP, applicable since 1 September 2016); the source of premium must be verifiable and cross-border fund rules are set by Mainland regulations. Policies signed inside the Mainland are not protected by Hong Kong insurance law. The Insurance Authority's circular of 12 June 2024 targets non-compliant sales models aimed at Mainland visitors.

Hong Kong has exchanged financial account information with the Mainland under the Common Reporting Standard since 2018; cash-value policies and trust accounts are reportable. Hong Kong does not tax death benefits or trust distributions, but a Mainland tax resident's obligations are set by Mainland rules and require advice there. This site carries on no sales activity in Mainland China.