On 2 November , 2005, The Legislative Council of The Government of The Hong Kong Special Administrative Region has passed the Revenue (Abolition of Estate Duty) Bill 2005 which seeks to amend the Estate Duty Ordinance to implement the proposal announced in the 2005-06 Budget to abolish estate duty.

The key objective of the proposed abolition was to facilitate the further development of Hong Kong as an important asset management center. By abolishing estate duty, it is believed that Hong Kong can attract more local and overseas investors to hold assets in Hong Kong. More companies and professionals will come to Hong Kong, and this will make Hong Kong more competitive as an international financial centre. Moreover, the abolition will reduce the time taken for obtaining the grant of probate or letters of administration, thereby helping to ease cash-flow problems that heirs to an estate currently face, particularly for the general public as well as operators of small and medium enterprises.

The Ordinance will come into effect three months from its publication in the gazette, i.e. 11 February, 2006. Estates of persons who pass away on or after the commencement date of the Ordinance will not be subject to estate duty. In order to facilitate the transition, it is proposed that, upon the commencement of the Ordinance, the estate duty chargeable in respect of deaths occurring on or after July 15, 2005 but before the commencement date (the interim period) would be reduced with retrospective effect to a nominal duty of $100 for estates of assessed value exceeding $7.5 million.