Help With Decision Move HK from UK!

[PDLM]

Don't know how it works but that's the deal. As DavidHK said you just have to provide the company with the right paperwork and voila. Tax-free rent.

This is simply not true unless your basic salary is below the taxable threshold (HK$108,000 per year or thereabouts).

Do you simply not declare the rent on your tax form in the box that asks "Total value of ALL places of residence provided" (Box no: 29 in Part 4.2)? If so then you are laying yourself open to prosecution, fines, and a whole heap of mess.

"Don't know how it works" is no defence in a Court of Law.

See here: http://www.ird.gov.hk/eng/faq/ctr.htm#a15 for the FAQ, and here http://www.ird.gov.hk/eng/pdf/pam44e.pdf for the more detailed pamphlet.

[jdawson]

Hi

Thanks for everyones response.

Think I need to clarify the situation. In summary the company would not be providing my accommodation or paying for it etc. I would need to pay for the accommodation out of my own salary.

However, I was told in an interview that my normal tax rate would be 16% but you could somehow the company would allow me to include the rent you pay as part of your total taxable which means the effective tax rate would be 11%.

Let me know if this sounds correct!

I've also received an "initial offer" which is £10k lower than my expectation so will reject in due course to ask for higher.

Relocation etc is as follows is there anything else I should look out for or is this about right for a local hire with relocation thrown in?

Annual bonus
Private medical
Pension (10% non contributing)
Relocation of US$2,500 cash, flight, and shipping.

Thanks again!

JD

[PDLM]

However, I was told in an interview that my normal tax rate would be 16% but you could somehow the company would allow me to include the rent you pay as part of your total taxable which means the effective tax rate would be 11%.

Let me know if this sounds correct!

For a certain ratio of rent to base salary then yes it would be possible to reduce the effective tax rate to 11%.

For example if your base salary is HK$100K per month then the tax rate will be 16% (i.e. you will pay 16K per month tax). However, if the company provides your accommodation (as far as the tax man is concerned) then the tax payable would be 17.6K per month, regardless of what the value of that accommodation is. Hence, if rent paid was 60K per month then the effective tax rate would be 11%.

In other words if your total package was $160K per month but 60K of that was defined as "housing allowance" and the 60K was indeed spent on rent then your effective tax rate would be 11%.

Note that this can have some adverse effects on bonuses (most companies would base the bounus on the $100K, not the $160K) so you needto factor that into the equation.

[nation]

JD - Think hard about rejecting it. You might have in demand skills that no one else in the local market has but the hiring landscape in HK is not one where employers will bend over backwards to satisfy you. Unless they've expressly said to you "we've been looking for years and there's absolutely no one and you're our last hope .... " employers in HK are quite willing to wait months for right candidate. They will hold off on projects, they will get others to fill in, they will do whatever they to cover the gap until they find the perfect person at the right budget. And HK employers are notorious for lowballing with a guaranteed offer and not budging.

Not saying that this will happen in your case but just something to be aware of and something to bear in mind when it comes to the tactics of your counter offer.

[skier]

i agree with CT1 re hongkong homes - only use as an online research. don't use them as an agent to represent you.
let's just say they are unethical...

[jdawson]

Hi

Wanted to say thanks to everyone who gave me advice, really appreciated and has helped me with making the big decision!

Latest situation is that I counter offered high and expected them to respond with something midway. However and to my shock the employer agreed to my counter offer and are now drawing up a contract and offer letter which includes most of the benefits that everyone advised to negotiate for.

So barring any hiccups I am hoping to be relocated by August. I guess my next headache is finding somewhere to live that's feasible to travel to central so will try and look through the other posts to get an idea of whats available.

thanks again!

JD

[nation]

Congratulations JD - good to hear you bucked the trend and things worked out for you

[ct1]

Excellent news. Well done.

[bellybabes]

Mid-levels is crowdy and the flats has no view. But it has a walkway (escalators) take takes you right down to connaught rd. Its also full of expats like yourself so you wouldn't feel too left out. Soho and Lan Kwai Fong (Bars and Clubs) are close by. But for a decent place prob cost 15K + unless you want to take those chinese buildings (old with no lifts) which may be cheaper.

Kennedy Town is an old areas full of locals and not much to do in the neighbourhood, but theer are a couple of new apartments. Check out Manhattan Heights http://www.manhattanheights.com.hk I used to live there and its like a 5 star hotel style apartment with service apartments at the lower floors (check websites) and private rental on the upper floors (much cheaper - contact local estate agents).
Full sea view and has a free shuttle to Central (Hong Kong Station of Airport Express) within walking distance from Connaught Rd.