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Posted Wed, 31 Jan 2024 15:35:34 GMT by ct5999
I am writing to seek clarification regarding the tax implications in the UK for a Long Service Payment I am entitled to receive in Hong Kong, following the conclusion of my fixed-term employment contract with my current employer based in Hong Kong. As a UK tax resident working under a fixed-term employment contract in Hong Kong, I have been managing my own PAYE for monthly tax and NI contributions. Recently, I was informed by my employer that my current contract will conclude on 28 February without renewal. Importantly, my position will not be filled, and as per the Hong Kong Employment Ordinance, my employer is obligated to make a statutory payment named Long Service Payment, totaling approximately HKD 150,000, within seven days after the contract's end date. I have been informed that my employer intends to offset the Long Service Payment against my Mandatory Pension Fund balance. Specifically, my Mandatory Pension Fund account balance will be reduced by HKD 150,000 due to this offset. In light of this, I would like to seek guidance on whether the Long Service Payment, which is a statutory payment mandated by Hong Kong law, is subject to UK tax.

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