I have been offered a relocation to Hong Kong by my current employer, an investment bank (I currently work in the UK). I wanted to get an idea of whether this sounds like a good offer.
They have offered me a 'local' HKD package.
They have taken my original UK salary, converted it to HKD and adjusted it downwards to offset the difference in tax rate.
On top they have added a monthly housing allowance of HKD 40,000.
a) Is it typical to offset the difference in tax in this way? I was hoping to benefit from the tax regime...
b) Does HKD 40,000 seem like a good housing allowance for a 2-bedroom flat in Midlevels for me and my girlfriend?
c) Will I have to pay 15% tax on my housing allowance (bearing in mind it will be paid as part of my salary)? Therefore is my effective housing allowance actually HKD 34,000?
d) Given current world economic events, does anyone have any advice about clauses or guarantees within the contract? Specifically, I'm worried about the scenario where I get made redundant after say 6 months, forcing me to return to the UK. In a scenario like this, I would end up having to pay full UK tax on my earnings, plus personally covering the cost of a year's worth of Hong Kong rental (I hear rental agreements are usually 12-month). Has anyone considered this when looking at a relocation package?