Housing allowance

[Capsule]

Are both working spouses entitled to separate housing allowance in Hong Kong?
I remember someone telling me that if one spouse is getting the HA, other can not claim it?

[rebekah]

I could be wrong but I believe that it depends on the company policy? I know my husband's company says only 1 spouse can receive one, but I don't really know...

[aussiegal]

I think Rebekah is right. Depends on company policy and undoutedly on whether you both work for the same firm. If you do I doubt they will pay two allowances. A friend was in the same situation and thought she'd struck the jackpot but the company set her straight immediately!

[MovingIn07]

When I was an expat in KL many years ago, my husband and I both worked for the same firm. We managed to swing 1.5 x housing allowance ...but that was just pure negotiation!

[dropdedfwed]

I really don't think it is the business of your employer what the details of your spouses package are. Unless your employer pays your rent for you, the housing allowance is part of the package, and does not matter if you are married, single or polygamous IMHO

if your allowance is paid to you on top of your income, I don't think there's a reason to be denied it just b/c your spouse gets an allowance too. It's their gain if they can make you beleive so, however.

When it comes to tax time, there are sections in your tax return where you claim your allowance, and the total you "report" is generally much less than it really is.

I've not heard of any law that is contrary, however that is not my field of expertise... actually, i'm still trying to find what my field of expertise is

[aussiegal]

Some of what you said makes sense Dropdedfwed, in theory, but my friend who worked for the same company as her husband was refused her housing allowance because it would have meant that they were able to afford a better house than the boss. This is an American company and such a thing was just not acceptable. I understand this completely. There's also the fact that if both of you are employed by the same company there's a good chance that one was a bit of a mercy hire. One person was really wanted and the second person was given a job to make the first one happen. Should they then get two full housing allowances? I would try for 1.5 times like Movingin07 did and cross my fingers in such a case.

If the couple work for different firms i agree that it is no business of the other's firm to know the remuneration package of the partner.

But you do have to remember that even if you are on a local package you have to declare to your employer what your housing bill is so they can tax it at the lesser rate.

[PDLM]

But you do have to remember that even if you are on a local package you have to declare to your employer what your housing bill is so they can tax it at the lesser rate.

Eh? It's a little more complicated than that. In order for the money you spend on housing to be taxed as anything other than simple salary the following are necessary:
- your employer must define the amount as "housing allowance" in your contract
- your employer must "exercise control" to ensure that your housing allowance is indeed spent on housing.

Moreover, if you are a couple and, for example, each of your employers pays each of your $20,000 housing allowance yet you only spend a total of $20,000 on housing then only $20,000 in total is going to be treated as housing allowance by the taxman, not $40,000.

I'm not sure how to interpret dropdedfwed's comment of "When it comes to tax time, there are sections in your tax return where you claim your allowance, and the total you "report" is generally much less than it really is." Making false declarations to tax authorities is, in my opinion, never a good idea. There are checks in place and if you get caught out it means a criminal record, deportation (if a non-permanent resident) and a right mess.

[dropdedfwed]

no, my comment was not meant to indicate that fraud was ok. but don't you only have to claim a max of 10% of your income as rent allowance, even if it is more than that?

section4.2 Place of Residence Provided by each employer or associated corporation
during the year:

• A place of residence provided to you by your employer or its associated corporation is
chargeable to tax based on the ‘rental value’. Rental value is calculated as a percentage of
the total income from your employer and the associated corporation which provided the
residence after deductions of the outgoings and expenses. The percentage used depends
on the nature of the residence provided:

Nature of Residence
House or flat, including service apartment 10%
2 rooms in a hotel, hostel or boarding house 8%
1 room in a hotel, hostel or boarding house 4%

is that the right way to interpret that?

I guess those who are on much higher income than me would not see this as a saving

DDF

[PDLM]

Yes - OK. What you claim is that the "taxable value" of housing provided to you by your employer (which means either leased by them directly or via housing allowance to you over which they exercise control to see that it is actually spent on rent) is 10% of the rest of your package.

Full details and examples in this document: http://www.ird.gov.hk/eng/pdf/pam44e.pdf

[aussiegal]

Up to 30% of your income can be used to pay housing and will benefit from the reduced tax rate. But as PDLM says you will have to prove it to your employer with lease agreements, rent slips etc. My husband's employer HR department even calls the leasing officer to verify that what we state is correct!