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Property owners jailed for tax evasion

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Three property owners were convicted of tax evasion charges at the Wanchai District Court today (December 5). They were each sentenced to two months' immediate imprisonment and fined $100,000.

The first defendant, aged 57, and the second defendant, aged 52, are brothers. The third defendant, aged 47, is the wife of the younger brother.

The defendants jointly own Property A, while the first and second defendants are also joint owners of Property B. The first and second defendants were each charged with nine counts and the third defendant was charged with five counts of wilfully with intent to evade property tax. They pleaded guilty to all charges.

The Court heard that the defendants received rental income totalling $6.8 million from letting the two properties during the years of assessment from 1995/1996 to 1999/2000. They wilfully with intent evaded tax by creating sham head tenants and shifting part of the rental income to the sham head tenants. The second defendant operated joint savings accounts with the sham head tenants as the depositories for the rental income and subsequently shared the proceeds with the other two defendants.

A spokesman for the Inland Revenue Department said tax evasion is a criminal offence. The maximum penalty under the Inland Revenue Ordinance is three years' imprisonment and a fine of $50,000 on each charge, plus a further fine equivalent to three times of the tax evaded.

Ends/Friday, December 5, 2003

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