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Parent/Grandparent Allowance - Give each one 12k and save up to 8.5k - Wow!

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  1. #11

    Join Date
    Feb 2012
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    Original Post Deleted
    Well my wife's sister provided my wife's dad a place to stay and food, and all my wife and I did was give him money. I wrongly assumed my wife's sister claimed her dad as he was her dependent and they lived together, but her income hasn't ever been high enough for the parent allowance to be useful to her.

    Also my wife's mom only recently started ordinarily residing in HK, and to be honest talking about income and/or taxes hasn't been encouraged in my wife's family. They always talk about property and shopping, but not directly about how much money they make or their taxes (because most people don't pay any salaries tax), and my wife has let me do all our tax stuff for a while.

    It's a eureka moment for me, and I somehow missed that plenty of locals have used this to save money on their HK taxes (if they actually owe anything), which most don't anyway especially if they have dependent children.

    I'm only starting to get more comfortable with talking about money, taxes, investments, and such with others. Many people unfortunately think talking about these things is boring (taxes) and/or taboo (money). Also many people I regularly interact with don't seem to care about these things that much, which is why I'm on this forum to find like minded people with some similar interests.
    z754103, hongkong7 and Sage like this.

  2. #12

    Join Date
    Feb 2012
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    411
    Original Post Deleted
    No. My wife's income has always been low enough for her to pay little to no tax.

    Only my wife's dad has ordinarily resided in HK since I've been here, but her mom only recently started to do so, and her grandparents haven't ever ordinarily resided in HK (at least in the last few decades). Lets say her family is a little complicated.

  3. #13

    Join Date
    Mar 2007
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    383

    Bumping this thread. How do you prove you've given HK$12k to your parent(s)? A scan of a bank transfer? Scouts honour?


  4. #14

    Join Date
    Sep 2018
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    Quote Originally Posted by mlclau:
    Bumping this thread. How do you prove you've given HK$12k to your parent(s)? A scan of a bank transfer? Scouts honour?
    Scouts honour. If Inland Revenue asks you will have to find a way to prove it so it's best to have some papertrail

  5. #15

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    Feb 2012
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    Quote Originally Posted by mlclau:
    Bumping this thread. How do you prove you've given HK$12k to your parent(s)? A scan of a bank transfer? Scouts honour?
    No proof initially required to be submitted when you claim an allowance. However, the FAQ further elaborates in detail "You don't have to state the amount of contributions actually paid in the year or to submit any documentary evidence with your tax return. However, you need to keep the relevant records for a period of 6 years after the expiration of the relevant year of assessment. The assessor may require you to provide such evidence when your case is subsequently selected for review."

    another part says "
    Generally speaking, IRD would not ask taxpayers to provide the receipts of the daily expenses of their dependent parents. Taxpayers can provide information on how they contribute to their parents' maintenance, for example, if contribution is made through automatic bank transfer or regular withdrawals from bank accounts, copies of the relevant bank statements can be provided for verification. Taxpayers can also supply the rental receipts of their dependent parent's residence, utilities and medical bills, if any, for examination when their cases were selected for review. If the information provided is contrary to information available to the IRD, taxpayers may be required to provide further information or evidence relevant to their claims."

    You can read the complete FAQ yourself at
    https://www.ird.gov.hk/eng/faq/all.htm

    My guess is that the IRD rarely reviews these cases, and easier ones to review would be claims where you claim a dependant parent or grandparent lives with you, but where other government records indicate you don't live together. If you do live with a dependant parent or grandparent you can claim an even bigger deduction than the one where you just give them 12k (or more) each year.
    shri likes this.

  6. #16

    Join Date
    Jul 2020
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    3

    Do you yourself have to be a permanent resident to do this?


  7. #17

    Join Date
    Feb 2012
    Posts
    411
    Quote Originally Posted by Hmak604:
    Do you yourself have to be a permanent resident to do this?
    No, you just need to need to file HK personal taxes. Your dependent parent/grandparent needs to ordinarily reside in HK, but they don't have to have PR, but I believe they need to have an HKID and just being here on a tourist visa wouldn't be enough.

    Check out the detailed FAQ at https://www.ird.gov.hk/eng/faq/all.htm

    You can also contact the IRD with any questions. If you have an eTax account, I feel it's best to send them a message that way you also have a record of whatever response they give you.
    shri likes this.