Introduction: Hong Kong residents inheriting the Mainland Estate
Hong Kong residents inheriting the mainland heritage is a daily legal matter that the Mainland-Hong Kong Cross-border Lawyers often needs to deal with. Due to the close ties between Hong Kong and the Mainland, many Hong Kong residents have purchased real estate in the Mainland or opened bank accounts to keep deposits. Further, some Hong Kong residents initially immigrated to Hong Kong from the Mainland, and they still have assets such as real estate and bank deposits in the Mainland. After the death of a Hong Kong resident, his heirs need to go through the the legal procedures in Mainland China to realize their inheritance rights and handle the transfer of the inherited estate. This article will introduce the legal procedures and legal issues involved in Hong Kong residents’ inheritance of the estate left in the Mainland China.
The Deceased Leaving a Will: Proof of the Anthenticity and Validity of the Will
If the Hong Kong resident left a will before his death, the Hong Kong resident must first prove the authenticity and validy of the will. This can be done in either of the two ways, i.e., applying to the Hong Kong High Court for a probate of the will, or alternatively obtain a legal opinion from a qualified Hong Kong lawyer which state that the will is authentic and valid.
This is because, if the testator is a Hong Kong resident, it is usually the case that his/her domicile place at the time of his/her death is Hong Kong. According to the conflict of law, the law of the domicile of the testator (i.e., Hong Kong law) will apply to determine whether the will is valid or not. As the Mainland authority is not familiar with Hong Kong law, the burden is on the heirs intending to inherit the estate in the Mainalnd China to provide documents to prove the will is valid by one of the above two mentioned methods.
In fact, Hong Kong residents should take this into consideration the above factors when they make a will to deal with estate located in the Mainland China. As the validity of the will is to be determined by Hong Kong law, and and inheritance procedure will take place in the Mainland China, it is usually a good choice to find a lawyer who is familiar with both Hong Kong inheritance and and Mainland inheritance law to advise on making a will to dispose assets in the Mainland.
Regarding how to arrange cross-border assets in Hong Kong and the Mainland China by making a will, please read another article of us, “How to Handle the Mainland-Hong Kong Cross-border Inheritance by Making a Will“.
Proof of facts related to Hong Kong by a Hong Kong Notarizaion
For Hong Kong residents to inherit Mainland estate, the heirs who intend to inherit the Mainland estate will need to do a notarization of all the documents and informaion that occurs in Hong Kong, such as Hong Kong identity, death certificates, birth certificates, marriage certificates, etc., which were issued by relevant agencies of the Hong Kong government, so that they cannot be used in the Mainland. The notarization need to be done by a Hong Kong lawyer and notary public entrusted by the Ministry of Justice of PRC to handle the notarization of documents to be used in the Mainland. For information on how to handle notarization by a notary public commissioned by the Ministry of Justice, please refer to another article at this site Classification, Proof Method and Format Requirements of Hong Kong Notarization of Documents for Use in the Mainland.
In many cases, the client’s relevant identification documents are missing or not complete at all. For example, in practice, it is common for Hong Kong residents to have an old customary marriage in the early days without a marriage certificate. In some cases, Hong Kong residents did not have a birth certificate becuase they were not born in Hong Kong. In these cases, the solution is to entrust a Hong Kong lawyer to apply to relevant departments of the Hong Kong government to provide relevant personal registration information in order to verify their identity and relationship with the deceased.
If there are many heirs, the client may consider some of them to inherit the estate and others to disclaim their right of inheritance in order to simplify the procedures. This also requires notarization of the declaration of disclaimer of inheritance rights in Hong Kong.
If the client cannot go to the Mainland to handle the inheritance procedures in person, the client can entrust a lawyer (such as our firm) to handle all inheritance procedures in the Mainland. Need to travel to the mainland. Our lawyers have the qualifications and background of practice in both the Mainland and Hong Kong, and can handle all inheritance procedures involving Hong Kong and the Mainland on behalf of clients in a one-stop manner.
Legal issues concerning Hong Kong residents’ inheritance of Estate in the Mainland-Inheritance by way of Notarization or by litigation.
After the documents related to identity and facts have been notarized in Hong Kong, the legal procedures for the heirs to do is to prove their inheritance rights in Mainland China. In practice, there are two ways to prove the heir’s inheritance right. One is through notarization to obtain a certificate of inheritance right. By that way, the notarization of inheritance rights is processed by a notary office where the main estate assets is located, and after the notary office is satisfied that the documents provided are sufficient to prove inheritance right, the notarial certificate of inheritance rights is issued by the notary office to heirs. This method is convenient and fast if the documents are suffient, and it is also commonly used. On the other hand, if there are disputes between or among the intended heirs, or any of the heirs do not cooperate with the notarization procedures, or there are other unresolvable problems such as lack of certain documents, which cause the Mainland Notary Office unable to handle the inheritance notarization (or unwilling to handle the inheritance notarization), the client will have to file a lawsuit with the local people’s court, and the people’s court will confirm the inheritance rights of the inheritor by a judgment after a hearing is held.
Which law is applicable to determine who have the inheritance right? Hong Kong law or Mainalnd law?
For Hong Kong residents inheriting estate in the Mainland. An important question is which law, Hong Kong law or the Mainland law, shall be applied to determine who has the right to inheritance. This question is very important because the scope of heirs and their entitled shares in estate may be very different under the laws of the Mainland and under the laws of Hong Kong. In particular, under the Hong Kong inheritance law, the spouse’s rights and interests are more prior to that of the parents’, while under the Mainland’s inheritance law, the rights of spouses, children, and parents are at the same level as to priority. Therefore, When the deceased dies leaving both parent and spouse, the application of Hong Kong law or Mainland law will be crucial to determine their respective inheritance righs and interests.
Regarding the difference between the scope of succession holders under the Hong Kong legal system and the Mainland legal system, please refer to my other article “How Mainland Residents Inherit Hong Kong’s Inheritance-Hong Kong Inheritance Lawyer Tells You” for the detailed discussion. Specifically:
According to Article 10 of the Inheritance Law of PRC , successors of the first priority order include: parents, children, and spouses. Under normal circumstances, each of the heirs in the first order equally be entitled to the estate left by the deceased.
Under Hong Kong law, the deceased’s parents are not the first-order heirs. If the deceased has spouse and children, the deceased’s estate will be all inherited by the deceased’s spouse and children, and the spouse will inherit the largest share, while the parents are not entitled to any share. Only if the deceased has left no child, the deceased’s parents will be among the beneficiaries of esate, according to Article 4 of Intestates’ Estates Ordinance (Chapter 73 of the Laws of Hong Kong)
Hong Kong Residents Inheriting Movable Property in the Mainland
As explained in the previous section, in accordance with Article 31 of the Mainland’s PRC Law on Choice of Law for Foreign-related Civil Relationships, “Statutory inheritance shall be governed by the law of the habitual residence of the decedent at the time of death. But the stututory inheritance of real property shall be governed by the law of the place where the real property is located”. Therefore, if the estate left by Hong Kong residents in the Mainland is movable property such as bank deposits, the determination of the heirs of the estate shall be governed by Hong Kong law. Then, How can the Mainland authorities, such as notarial offices or courts, know the laws of Hong Kong?
Article 10 of the law stipulates that foreign laws applicable to foreign-related civil relations shall be ascertained by the people’s courts, arbitration institutions or administrative agencies. If the parties choose to apply foreign laws, they shall provide the laws of that country. (Hong Kong is not a foreign country, but as far as the application of this law is concerned, Hong Kong law is regarded as a foreign law).
There are currently no clear legal rules on how the mainland notary offices and people’s courts can ascertain the laws of Hong Kong, nor is there any unified practice model. Regarding inheritance legal affairs, we usually, as Hong Kong lawyers, issue a “Hong Kong Lawyer’s Legal Opinion” on Hong Kong law to the Mainland authorities for its reference as a way of find out Hong Kong law. Such Hong Kong lawyer’s Legal Opinion will also need first be notarized by a Hong Kong Notary Public entrusted by the Ministry of Justice of PRC for use in the Mainland.
Hong Kong Residents’ inheritance of Mainland Estate: Cost Issues
Hong Kong Resident’s Inheritance of Mainland inheritance mainly involves the following costs: (1) lawyer’s fee; (2) Hong Kong notarization costs; (3) Mainland notarization costs. The notarization fee of the Mainland office is usually charged at 0.8% of the value of the estate to be inherited; (4) The government fee for the transfer of the title of the real estate.
It should be noted that there is currently no inheritance tax in the Mainland. However, for transfer of real property title from the deceased’ name to the heirs’ name, the heirs will need first apply for exemption of stamp duty and obtain an exemption certificate, otherwise stamp duty will be charged.
In view of the complicated procedures for property transfer and tax exemption procedures in the Mainland, it is recommended that clients entrust a Mainland lawyer to handle the procedures. Our lawyers are qualified to practice law in both Hong Kong and the Mainland China, and we provide one-stop legal services of Hong Kong resident inheriting Mainland Estate including the procedure of both in Hong Kong and in the Mainland China. Usually Clients do not need to go to the Mainland to handle it in person.
For further information on Mainland-Hong Kong cross-border inheritance matters, please refer to another article by us: How to Handle Cross-Border Inheritance between Mainland and Hong Kong.
Please do not hesitate to contact our inheritance and probate laweyer for any of your inheritance issues regarding inheritance of estate in Hong Kong and/or in the Mainland China.