The Sovereign Art Foundation announces 2010 Prize Finalists and Exhibition

The Sovereign Art Foundation has announced the names of the artists short-listed for its seventh annual Asian Art Prize. Entry is accepted only by nomination by one of the Foundation’s network of art experts. The works of the 30 finalists will be exhibited at the Rotunda, Exchange Square from the 21 - 26 February 2011, thanks to the support of Hongkong Land.

During the exhibition, the judges will choose the winner of the US$25,000 prize. Voting to select the winner of the US$1,000 Schoeni public prize has already commenced on The Sovereign Art Foundation website. The public can also cast votes at the exhibition.

The winning entry of this year’s Sovereign Asian Art Award and the Schoeni public prize will beannounced at a Gala Auction and Dinner sponsored by Julius Baer, leading Swiss private
banking group, on 16 March 2011 at the Four Seasons hotel. During the evening, the works of the remaining 29 finalists will also be auctioned.

As the principal sponsor, Julius Baer, the leading private bank with unwavering tradition and dedication in supporting art, is proud to bring continuous support to talented artists in the region. Their involvement with the Sovereign Art Foundation is evidence of their commitment to Asia and the value they place on art platforms worldwide.

“Julius Baer has a long tradition of sponsorship commitments in the fields of art and we are
delighted to lend our support to The Sovereign Art Foundation to celebrate emerging artistic
talent in the continent,” said Andrea Benenati, CEO Hong Kong & North Asia, Julius Baer.

Howard Bilton, Chairman of The Sovereign Group commented, “We have received
overwhelming numbers of nominations this year, an indication of The Sovereign Asian Art Prize has become one of the most well-recognised annual art awards in the region.”

“In addition to recognising the most ground-breaking and influential emerging artists of our time, The Sovereign Art Foundation will continue to support charitable artistic causes across Asia,” added Mr. Bilton.

Works are accepted across all 2D media and the entries received this year demonstrated the
exciting range of practices occurring within these mediums.

The 30 works were selected from over 400 nominated entries from across Asia by this year’s
distinguished judges, David Elliott, Fumio Nanjo, Graham Sheffield, Tan Boon Hui, David Tang and Xu Bing. This year’s entries also include works by artists from Afghanistan, Kyrgyzstan and Iraq for the first time.

A compelling range of emerging artists will be featured at the exhibition, including Hong Kong
artists Sarah Lai and Tang Kwok Hin, both fine arts graduates of the Chinese University of
Hong Kong. Lai aims to freeze and extend moments of time through her simple but richly
expressive paintings, and Tang produces photographs of intricate imaginary landscapes, using ready-made elements taken from print and electronic media and product labels. Macau block print painter and printmaking teacher Wong Cheng Pou, has also been shortlisted as a finalist for his delicate Song Dynasty-inspired paintings.

The Sovereign Art Foundation will keep the winning entry and the remaining 29 works will be auctioned with 50% of the proceeds going to the artist and the other 50% to charities supported by the Foundation.

This year, The Sovereign Art Foundation has pledged to continue its support to help the
children in M’Lop Tapang in Cambodia and Kalki in India using the arts as rehabilitation and therapy. The Foundation will also be launching a new partnership with the Christina Noble Children’s Foundation in Vietnam.

Exhibition dates and hours:
Press Preview:
21 February 5:00 – 6:00pm
Opening Day:
21 February 7:00 – 9:00pm
General Opening:
22 - 25 February 10:00am – 8:00pm
26 February 10:00am – 3:00pm

Purchasing Property in Hong Kong

An article written by Howard Bilton, explaining what you need to know about purchasing property in Hong Kong.

There is much enthusiasm in Hong Kong for investment in property. Companies can go bust and their shares and bonds become worthless. Property will always have a value and it’s safe to say that any piece of Hong Kong property will be worth more in 10 years than it is now although it may be a roller coaster ride. . There is a shortage of housing here exacerbated by the government’s policy to release land slowly to maximize the price. The government announced a special stamp duty designed to curb property speculation and cool an overheating market. By way of reminder buyers and sellers are jointly liable to pay a special 15% tax on property sold within 6 months of acquisition, 10% if held between 6 and 12 months and 5% if sold within 24 months of purchase. Why not release some more land instead? Ultimately the market will only calm down if there is sufficient supply to meet demand. A properly analyst friend recently estimated that annual demand for new properties was 40,000 units and only about 15,000 units come on to the market each year so the cause of the rapid rise in prices seems clear enough.

The special ‘tax” is unlikely to make much difference. For those purchasing properties of a higher value or for investment it has probably always been the case that it is prudent to purchase in the name of a company and pay corporation tax on rental income rather than personal tax. This is due to the differing treatment of interest payable on loans taken out to purchase the property. An individual may only get a tax deduction of up to HK$100,000 in mortgage interest every 7 years and only for a loan on their primary residence. The deduction will have little impact on those purchasing more expensive properties and has no application to anybody purchasing property for investment. If a company makes the purchase it pays profits tax not property tax and all expenses in relation to the property are deductible from income. This is a rather compelling reason to purchase through a company.

Corporate ownership allows for anonymity. An individual purchaser’s name will appear on the public property register but it is relatively easy to disguise the true ownership of a company. Ownership of a company can easily be rearranged by transferring the shares and allows the special tax to be avoided because there is no transfer of title in the property. In some countries a transfer of the shares in a property owning company is treated and taxed as though it was a transfer in the property itself. This is not the case in Hong Kong. The government have not enacted any legislation with that effect so the special tax is relatively easy to avoid. In fact the government has always had legislation at its disposal which could have a similar effect to the special stamp duty. As long ago as 2008 the Financial Secretary indicated that a rapid purchase and sale of a property would be treated as trading in property and gains would be taxed as income not capital gains. The former is taxed the latter is not. Be aware of this possibility. This measure is similar to the position for foreign investors in UK property. Non residents of the UK are not subject to UK CGT. if an Hong Kong resident purchases UK property and exploits it by renting it out then on resale there will be a capital gain produced which is not taxable in the UK. However, if that same investor buys property and then sells it rapidly he can be considered as producing income from trading in property and would therefore have to pay UK income tax on the profit.

Frequently those going to live in a higher tax country are faced with estate duties and global taxes on income and capital gains. Often a solution to that problem is to transfer assets into a trust or foundation prior to arrival in the new country. Being able to achieve that by a transfer in shares of a company is much cheaper and easier than trying to rearrange title to the property.

A Hong Kong company can be used to purchase Hong Kong property but it will be frequently more advantageous to use an offshore company and register it in Hong Kong if necessary. Transfers in the shares of an offshore company can be made completely free of tax and stamp duty. Transfers in the shares of a Hong Kong company attract stamp duty, albeit at low levels, and some other costs and expenses.

Either way there are substantial advantages to corporate ownership so investors would be wise to consider this option but legislation and tax systems change rapidly and without notice so it would also be wise to check with your advisors before proceeding.