Validity of Unstamped Documents & Inadequate Consideration

Validity of Unstamped Documents

No documents chargeable with stamp duty shall be received in evidence in any proceedings whatsoever except:

  • criminal proceedings,
  • civil proceedings by the Collector to recover stamp duty or any penalty payable under the Stamp Duty Ordinance,

or be available for any other purpose whatsoever, unless such document is duly stamped.

Provided that a document which is not duly stamped may be received in evidence in civil proceedings before a court if the court so orders upon the personal undertaking of a solicitor to cause

  • such document to be stamped in respect of the stamp duty chargeable thereon, and
  • any penalty payable in respect of the document under section 9 to be paid.

Inadequate Consideration

Under section 27(4) of the Stamp Duty Ordinance (“the Ordinance”), if the Collector of Stamp Revenue is of the opinion that the consideration stated in a conveyance of property or a transfer of Hong Kong stock is inadequate, the conveyance or transfer shall be deemed to be a conveyance or transfer operating as a voluntary disposition inter vivos (i.e. a gift).  The stamp duty payable on such conveyance or transfer will be calculated based on the value of the property or stock.  There are similar provisions for agreement for sale of property under section 29F of the Ordinance.

In respect of a conveyance or an agreement for sale of property, the stamp duty payable will normally be charged by reference to the consideration stated in the submitted instrument first.  Then the Stamp Office will, depending on the circumstances, request the Rating and Valuation Department (“RVD”) to provide expert advice as to the adequacy of the stated consideration.  If the stated consideration is less than the value of the property assessed by the RVD, the duty payer will be required to pay further stamp duty based on the assessed value.

The Stamp Office reminds duty payers that all the facts and circumstances affecting the amount of the stamp duty chargeable on an instrument (including the details relating to the consideration of the transaction) have to be fully and truly set forth in the instrument.  Duty payers must not deliberately report in the submitted instrument consideration less than the actual transaction amount in order to avoid paying the correct amount of stamp duty.  The Stamp Office has an established mechanism to review doubtful transactions and instruments.  Any person who with intent to defraud the Government executes any instrument in which all the facts and circumstances affecting the amount of the stamp duty chargeable on the instrument are not fully and truly set forth, or practises or is concerned in any fraudulent act, contrivance or device, commits an offence and shall be liable to a fine and to imprisonment if convicted.

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Last revision date: June 2021