ORSO pension - UK tax implications?

  1. #1

    Join Date
    Dec 2008
    Sai Ying Pun

    ORSO pension - UK tax implications?

    Hi all,

    soon to be leaving HK to return to UK and will be eligible to take my ORSO benefits as a lump sum when I go.

    Since I will be working for the same group in the UK, they've said I can also leave it as it is until employer contributions are 100% vested, and then take the lump sum in a couple of years time.

    My question is whether any or all of the lump sum would be taxable in the UK if I wait until I'm UK resident before receiving it.

    From what I've read, I think the double tax treaty between UK and HK means that it would not be eligible for tax in the UK, since I've been working in Hong Kong for the full period when the benefits were being accrued.

    any thoughts from tax experts or people who have been in a similar situation?

  2. #2
    UKP is offline

    Join Date
    Oct 2015

    Hi There - This is a very complicated area to advise in but essentially for the fund to qualify for the tax privileges under the ORSO only HK earnings can be invested. Therefore if you are going to be seconded to the UK then it is essential to ensure that those earnings will be treated as part of your HK earnings.

    You should seek local tax advice in HK such as Lutea (Hong Kong) Limited who are situated in Central.


  3. #3

    Join Date
    Feb 2019

    Dredging-up this topic as I will eventually face this situation as I'm sure many of you other British folks will also.

    Question 1: If, before I leave HK, I dispose of my ORSO (I guess also relevant for MPF), is this enough to avoid paying UK tax on the gains, or do I need to make sure I dispose in the prior tax year (I would therefore need to engineer my move date to be just before the end of a tax year)? Basically, are the rules the same for ORSO/MPF as they are for disposing regular stock holdings.

    Question 2: If I move with my company (permanent move to UK) and they give me the option to keep my ORSO ticking over until it reaches 100% vesting*, will the gains at disposal be taxable in UK given that I will by then be UK resident for tax purposes?

    *no clue if they will give me this option