If you don't have *** on your HKID that means you are not considered a Chinese national, so just declare British nationality on the form. Your HK PR is only a resident status so does not contradict your British nationality.
As others have said, *** = eligibility for HKSAR Re-Entry permit, which in turns = Chinese nationality.
I believe before 1997, ImmD's determination of Chinese nationality = ethnic Chinese. After 1997, Chinese nationality is based on PRC's nationality law. That's why some overseas born people have *** on their HKID despite not being eligible for the HKSAR passport. They registered for HKID before the handover.