The Hong Kong government has introduced a Bill providing tax concessions for investments managed by eligible single-family offices, with retrospective effect from 1 April 2022.

The Inland Revenue (Amendment) (Tax concessions for family-owned investment holding vehicles) Bill 2022 will exempt family-owned investment holding vehicles (FIHVs) and their portfolios of special purpose entities from tax on transactions carried out by a Hong Kong-based family office. The provision is similar to that already in effect under the unified fund exemption regime.

The exemption includes profits earned incidental to the qualifying transactions, subject to a 5 per cent threshold. A minimum asset value of HKD240 million also applies. The tax relief is also available to special purpose entities in proportion to the FIHV's beneficial interest. An FIHV can elect for the tax concessions by making an irrevocable election in writing...