LI NA v. THE COLLECTOR OF STAMP REVENUE

DCSA 13/2025

[2026] HKDC 344

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

STAMP APPEAL NO. 13 OF 2025

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BETWEEN

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DECISION

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1.  This is the Appellant’s application dated 30 September 2025 (“the Application”) under section 14(1B) of the Stamp Duty Ordinance, Cap. 117 (“SDO”) for an order to bring an appeal against two Notices of Assessment both dated 2 September 2025 (“the Appeal”) without payment of the stamp duty in full or in part or giving any security thereof. The assessed amount in total is HK$44,032,500 (“Assessed Amount”).

2.  The Respondent objects to the Application and asked for the dismissal of the Appeal.

Background

3.  The Appellant has been a Hong Kong Permanent Resident (“HKPR”) since 2015. She acquired House No. M, No. 28 Mount Austin Road, Hong Kong (“the Property”) for HK$171M in 2020.

4.  In doing so, the Applicant declared in the stamping application that, inter alia, she was a HKPR acting on her own behalf when purchasing the Property.

5.  It was subsequently revealed that the Property was wholly financed by way of a private loan advanced by an alleged friend of the Appellant, Ms. YANG Juan (“Yang”), in the sum of HK$180,100,000. Yang was not a HKPR.

6.  The Respondent considered that the agreement for the purchase of the Property, which was initially stamped with ad valorem duty (“AVD”) at Scale 2 in the amount of HK$7,267,500 by reference to the stated consideration and exempted from buyer‘s stamp duty (“BSD”), should be further chargeable with AVD at Part 1 of Scale 1 rate and not to be exempted from BSD, by reason that the Appellant was not “acting on her own behalf” when purchasing the Property contrary to the requirements of SDO ss.29BB(2) and 29CB(2).

Legal Principles

7.  The Application was made under SDO s14(1B), which stipulates:

“Where the court, on an application made by the person intending to serve a notice under subsection (1), is satisfied that it would impose hardship on the person to require him to pay the stamp duty or part of the stamp duty, as the case may be, under subsection (1)(b), it may by order allow the appeal to which the notice relates to be brought -

(a) without payment of the stamp duty or the part of the stamp duty, as the case may be, under subsection (1)(b), or only on payment of such part of the stamp duty or the part of the stamp duty, as the case may be, as the court may consider reasonable in the circumstances of the case; and

(b) on security being given to the satisfaction of the court for the payment of the stamp duty or party of the stamp duty, as the case may be, that would, apart from this subsection, have to be paid before the appeal can be brought under subsection(1).”

8.  In the interpretation of the term “hardship”, the court is required to apply the test as follows:

a) To “recognise and take into account a party’s subjective stance in forming an objective view in all the circumstances of the case as to whether hardship was made out” (Wan Wah Shing v Collector of Stamp Revenue 4 HKLRD 674)

b) Thus even though hardship “might be self-induced and due to bad financial planning” but “that was not the criteria the Court need to consider as a matter of law” (Ho Kin Tai v Collector of Stamp Revenue 2 HKC 545).

c) Mere “inconvenience is not hardship” and that the appellant is required to demonstrate that he has “exhausted all means to raise the funds for payment of stamp duty” (Cheng Yung Ching v Commissioner of Inland Revenue 4 HKC 489) by providing a “complete picture of one’s financial status” including detailed disclosures of assets, savings and sources of income” (Choi Ching v The Collector of Stamp Revenue [2025] HKDC 1263).

Consideration of a preliminary point

No application made under SDO s14(1A)

9.  The Respondent argued that the Appellant did not made this application (within 14 days or at all) to the Respondent for postponement of payment pending appeal but had applied directly to court in the Application under SDO s14(1B). As such, she has failed to provide any security under s14(1A) which, as the Respondent argued, is also “a condition precedent” under s14(1B).

10.  I do not agree.

11.  S14 of the SDO provides:

“(1) Any person who is dissatisfied with the assessment of the Collector under section 13 or 47L may –

(a) within a period of 1 month from the date on which the assessment is made…

(b) subject to any order of the court under subsection (1B), on payment of the stamp duty in conformity therewith or, where payment of stamp duty or any part thereof is allowed to be postponed under subsection (1A), on payment of the part (if any)….

(c) by notice served on the Registrar…

appeal against the assessment to the court…”

12.  Thus, the application under subsection (1A) (nor the provision of security under the same subsection) is not a pre-requisite (or “condition precedent”) for an application under subsection (1B).

13.  Indeed, this is confirmed by the wordings under subsection (1B) (see paragraph 7 above) which affords the court a discretion to require the appellant to provide security. This discretion would clearly be redundant if all potential appellants would first need to apply under subsection (1A) and has provided the required security already.

14.  Thus, it is clear that if the appellant applied for an appeal against assessment within 1 month from the date of the Notice of Assessment and also applied to court under subsection (1B), then it would be for the court to decide whether to allow the appeal with payment of stamp duty (the entire sum or part of) and / or to require security on such to be provided by the appellant.

15.  The Appellant did not apply under subsection (1A) because she is required to provide “security to the satisfaction of the Collector…for the payment of the stamp duty”.

16.  Under subsection (1A), there is no discretion for the Collector to allow for security for, e.g. only part of the stamp duty upon demonstration of hardship. As such, if the Applicant’s case is that she cannot provide security for HK$44,032,500 “to the satisfaction of the Collector”, there is really no point for her to apply under subsection (1A) but to proceed, as such here, to subsection (1B).

The Applicant’s case

Hardship

17.  The Applicant’s case is that she was divorced in 2016 from a wealthy businessman and the Divorce Agreement (Hearing Bundle B2 p. 302) confirms that she only received an one-off payment of HK$10 million and that was so she could secure the custody of her 3 children (aged 18, 12 and 11).

18.  Thus, her case was that the purchase of the Property was a high risk investment in order to rebuild her financial independence, because she thought that this was a good bargain and that the property price of Hong Kong would go up after the Covid. As it turned out, it was not: the property market went down and the Property was in a dilapidated state and could not be rented out. In the meantime, Yang held the title documents as security by way of a Deed of Deposit of Title Deeds (Hearing Bundle B1, p.222).

19.  I would think that the Respondent case is that the Appellant was not acting “on her own behalf” in the purchase (but was a sham for a non-HKPR purchaser to take advantage enjoyed by a HKPR for the reduced Stamp Duty), but the Applicant’s case is that this was a self-induced hardship when a gamble went wrong. However, this is a matter for appeal (should this be allowed to proceed) and does not concern the current consideration as a matter of law.

20.  During the hearing, there was extensive examination of the information disclosed on the Applicant’s asset, which I will summarise below.

The Property

21.  The Applicant’s case is that this is a shell and cannot be rented out for income. She has provided photographs which supported this (Hearing Bundle B2, p.434)

22.  Further, the Property cannot be charged without consent by Yang because she is holding the Title Deeds. And Yang has stated her refusal to give consent because she is an unsecured creditor and allowing a charge would dilute the priority of her remaining debt (Yang’s Affirmation, Hearing Bundle A, p. 46).

23.  She has also sought bank loans from HSBC but was turned down due to unavailability of title deeds (Hearing Bundle A, p. 67)

24.  The Applicant has listed the Property for HK$250M and claimed to have lowered that to HK$200M, but no buyer found.

“Woo Tin” jade

25.  The Applicant also disclosed the sale of her jade collection in March 2024 at an apparent discount to raise about HK$48.3M to Li Bei (Affirmation of Li Bei Hearing Bundle A, p. 40). The proceeds were used to partially repay Yang‘s loan (Hearing Bundle A, p.22 and 57, Hearing Bundle B1, p. 159)

Personal jewelry

26.  The Applicant has also sold such to Yang for HK$5.7M as partial repayment of the loan (Hearing Bundle A, p.22 and 60, Hearing Bundle B1, p. 174, Hearing Bundle B2, p. 370)

Belcher’s property

27.  This property was held by the Applicant for her daughter (who turned 18 in August 2025) as per the 2016 Divorce Agreement so the Applicant has no beneficial interest.

Divorce Compensation

28.  The Applicant claims that the HK$10M received incrementally over 8 years was exhausted after use for rearing the children and debt servicing.

Bank accounts

29.  The Applicant’s disclosed accounts showed little liquidity following a HK$5M repayment to Yang in September 2025.

Income and expenses

30.  The Applicant currently resides in Horsham, UK, working as a teaching assistant earning about £1,800 monthly (Hearing Bundle A, p. 23, B1, p. 186) while receiving HK$200,000 as monthly maintenance for the children from her ex-husband (Hearing Bundle A, p. 23 and 62, B2, p. 426). She claims that her outgoings was around HK$216,200 a month.

31.  She also claimed that relationship with ex-husband is strained and his business was also facing difficulties so request for assistance failed.

32.  In short, the Applicant’s case is exhaustion of assets and depletion of wealth causing hardship.

The Respondent’s case

33.  The Respondent opposes the Application.

34.  Ms. Shek, Senior Government Counsel for the Respondent, submitted, that the evidence form the estate agency agreement (Hearing Bundle B1, p. 218-221) showed the Property has been listed at HK$250M and it did not sell, there is no reason why she could not list it at a lower price.

35.  I agree.

36.  Indeed, I also note that the “Validity Period” of estate agency agreement was between 1 November 2024 and 31 October 2025. There was no evidence that there was any further attempt to engage any agency to sell the Property, at a lower price or otherwise, after that period.

37.  A further point of note is that the Applicant’s claimed lack of liquidity.

38.  As above, the Notices of Assessment were dated 2 September 2025. In the preceding month, the Applicant’s HSBC account showed that there was some HK$10M (Hearing Bundle B2, p. 378). Her Lloyds account also showed a healthy balance of around £280K, or around HK$3M (Hearing Bundle B2, p. 388). Thus, she has a total of HK$13M at that point of time.

39.  The Applicant claimed that her funds were exhausted after a repayment of HK$5M for Yang’s loan. The dates of the repayment was 29 and 30 September 2025 (Hearing Bundle B2, p.382) which were just a few days before the Notices of Assessment were due (1 month from their date).

40.  Yang’s evidence (a schedule of repayment prepared by Yang, Hearing Bundle B1, p. 298-300) showed that the Applicant has last paid Yang’s loan on 25 April 2024 before she paid the HK$5M. This might suggest that Yang had been a tolerant lender in allowing the Applicant to make no payment for some 1.5 years. As such, one might question why the Applicant suddenly decided to repay HK$5M right before the due date for the payment for the Notices of Assessment.

41.  Thus, Ms. Shek argued that it was not true that the Applicant did not have liquidity in her bank account: she chose to repay Yang after a gap of 1.5 years in order to create that situation.

42.  Further, for the Belchers property, I note that the Applicant argued that the beneficial owner was actually her eldest daughter (Hearing Bundle A, p. 56). This is a property purchased for HK$24.5M in 2011 (Hearing Bundle B2, p. 317-325). The Applicant has not provided any information as to whether this was being rented out and, if so, how the rental income was ultilised. Further, there was also no evidence as to whether there was any attempt to seek to raise funds by perhaps charging this property with consent of the daughter.

Conclusion

43.  After considering the above, I find that the payment of HK$44,032,500 would impose hardship on the Applicant. However, I also find that the Applicant has not exhausted all her means to raise some funds and, indeed, the timing of her payment of HK$5M to Yang raises a question on motive at the very least.

44.  The court would exercise a balancing exercise between the Applicant’s likely means to raise funds and likely hardship. I am of the view that it is reasonable in the circumstances of the case to give an order for the part payment of the stamp duty to the sum of HK$5M within 84 days of this Decision for the Appeal to be brought.

45.  There be a costs order nisi that the costs of the Application be in the cause of the Appeal.