UK-HK Tax Treaty

Hi I am a non dorm UK tax resident but have employment income from HK. Since I already paid tax on my HK employment income, is my employment income still taxable in the UK?

Hi,

If you were resident in Hong Kong in the period that you undertook this employment, then it is only taxable in Hong Kong, so you would not declare it as income in a Self Assessment tax return. You could, in the interests of full disclosure, mention it in box 19, the free hand box on page 7 of SA100.

Thank you..

I have become a UK tax resident in 2023. But I still return to HK for a few months each year to work. Is this income from HK taxable in the UK? Do I need to declare it in self assessment per UK/HK tax treaty?

Hi A Chan,
If the HK work is for a UK employer then it is still liable in UK.
If a HK employer, under the terms of the DTA, income for work carried out on HK soil is only taxable there.
Thank you. 

 

Thank you. My work is for a HK employer. Since it is only taxable in HK, would it be liable to UK tax if I bring it to the UK? How about my rental income from HK from a property I own in HK? Is it liable to UK tax? Any restriction in bring it into the UK? Warm regards

Hi,

As stated, the payment for work done in Hong Kong is only taxable there. The rental income though, must be declared if you bring it to the UK.

Thank you.

Thank you v much HMRC Admin. So if I don't bring my rental income in HK to the UK, I don't need to declare it, is this correct? I am preparing my self assessment for 2023-24 right now. I have the following during the year: 1) HK employment income (which I have paid tax in HK) for a HK employer 2) Interest earned from banks in HK 3) Dividends from fund investments in HK 4) Interest income in the UK May I confirm if my understanding is correct? A) I do not need to declare in my self assessment of my HK employment income. They are only taxable in HK. B) I cannot bring my HK employment income into the UK, otherwise they shall be subject to UK tax. C) I need to declare my interest from HK, dividend income from HK and interest income in the UK in my UK self assessment. D) Would it still be eligible for UK personal allowance in my self assessment for the year 2023-24? Thank you so much in advance.

Hi.

If you are resident in the UK then by default, you are taxed using the arising basis on your world-wide income regardless of whether your bring it to the UK or not, so you would declare your

HK property income in the foreign section of a tax return and claim a foreign tax credit of up to 100% of the foreign tax paid.  You will need to review the tax treaty between Hong Kong and

the UK, to determine if any of your Hong Kong sources of income are only taxable in Hong Kong.  Have a look at the article on employment, interest etc to see how you are affected by them:

UK/HONG KONG DOUBLE TAXATION AGREEMENT AND PROTOCOL

Thank you.

Dear Sir, Thank you for replying to my inquiry. I have read through the treaty. The Employment Income section of the treaty is as follows: Income from Employment 1. Subject to the provisions of Articles 15, 17 and 18, salaries, wages and other similar remuneration derived by a resident of a Contracting Party (UK) in respect of an employment shall be taxable only in that Party (UK) unless the employment is exercised in the other Contracting Party (HK). If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other Party (HK). In the above section, its says that income earned in HK from a HK employer by a UK tax resident MAY be taxed in HK. It does not exactly say if the income MAY be taxed in the UK as well. Does it mean this income will not taxed in the UK, if tax has already paid for this income in HK? Is the correct way of interpreting the treaty that if it doesn't state explicitly that a party may tax a certain income, then the income is not taxable by that party? Thank you for your clarification.

There is another section of the treaty on Director's fee. Directors’ Fees Directors’ fees and other similar payments derived by a resident of a Contracting Party in his capacity as a member of the board of directors of a company which is a resident of the other Contracting Party may be taxed in that other Party . It says here the director's fee may be taxed in the other Party, does it mean this income is not taxable in the contracting party because there is no text in the treaty saying that the contracting party May tax for this director's fees.

Hi,

If you are living in the UK it will be taxed in the UK as you will be working remotely so not on Hong Kong soil. You can claim foreign tax credit relief if the same source is already taxed

there. The same appllies to the directors fees if you are in the UK.

Thank you.

Dear sir, Thank you. for replying. I refer to my first inquiry 9 days ago on my employment income, I confirm that I have returned to Hong Kong to carry out the work for certain months of the year. The nature of my work dictated that it can only be physically carried out in Hong Kong soil. Q1) Does it mean that it is not taxable in the UK? Q2) Can you please confirm that if the treaty does not say a party may tax certain income, then that income is not taxable in this party? Thank you and warm regards

Hi,
That is correct for both.
Thank you.

Thank you so much HMRC Admin 19