Tax in Hong Kong for expats is built on a territorial system: salaries tax applies to income from employment in Hong Kong, at progressive rates from 2% to 17% on net chargeable income or, if lower, a standard rate of 15% on the first HK$5 million of net income and 16% above that. Hong Kong does not generally tax individuals on capital gains, dividends or bank interest, although trading or business profits can fall within profits tax, and it has no estate duty, gift tax, wealth tax or VAT. For British expats, though, the move does not end every UK tax question, and Hong Kong differs from some Gulf states, such as Qatar and Saudi Arabia, in one important way: under the UK and Hong Kong double taxation agreement, UK pensions, including lump sums, paid to someone who is resident in Hong Kong for treaty purposes are taxable only in the UK. UK rental income, UK property gains and, for long-term UK residents, UK inheritance tax can also continue. This guide explains how Hong Kong salaries tax works for expats, the 2026 to 2027 allowances, the Mandatory Provident Fund (MPF), property taxes, what the treaty says about UK pensions and investments, and the UK points to plan around if you later return. It is general information, not personal tax advice. Hong Kong figures are for the 2026/27 year of assessment (1 April 2026 to 31 March 2027) and UK figures for the 2026 to 2027 tax year unless another date is given, the information was reviewed on 10 November 2026, and all rules and figures should be rechecked before you rely on them.
Hong Kong taxes employment income on a source basis. Under the Inland Revenue Ordinance, salaries tax is charged on income arising in or derived from Hong Kong from an office, employment or pension, and residence, domicile and nationality do not decide liability under domestic law. In broad terms, if your employment is a Hong Kong employment, usually judged by factors such as where the contract was negotiated and enforceable and where the employer is resident and pays you, your whole salary is generally taxable, unless all your services are rendered outside Hong Kong. If the employment is a non-Hong Kong employment, only the income attributable to services rendered in Hong Kong is taxable, normally by time apportionment. In both cases visits to Hong Kong totalling 60 days or less in the basis period are disregarded when deciding whether services were rendered there, but the 60 day rule does not apply to income from an office, such as a director's fee from a Hong Kong company. Taxable employment income includes bonuses, most allowances and share option gains on exercise, and where an employer provides housing, the taxable amount is generally a rental value of 10% of the employee's other employment income, less any rent the employee pays, rather than the actual rent, which can be a significant benefit. Whether your employment is Hong Kong or non-Hong Kong employment depends on the facts, so it should be checked with a Hong Kong tax specialist, particularly if you are seconded or work across several countries. The year of assessment runs from 1 April to 31 March, returns are issued by the Inland Revenue Department (IRD) and tax is generally collected by assessment, including provisional tax for the following year, rather than deducted monthly by employers.
For 2026/27, salaries tax is the lower of two calculations. The first applies progressive rates to net chargeable income, meaning income after deductions and personal allowances: 2% on the first HK$50,000, 6% on the next HK$50,000, 10% on the next HK$50,000, 14% on the next HK$50,000 and 17% on the remainder. The second applies the standard rate to net income after deductions but before allowances: 15% on the first HK$5 million and 16% on the excess, a two tier structure that has applied since 2024/25. Following the 2026-27 Budget, the IRD confirms that legislation passed by the Legislative Council on 13 May 2026 increased the basic allowance from HK$132,000 to HK$145,000, the married person's allowance from HK$264,000 to HK$290,000, the single parent allowance to HK$145,000 and the child allowance to HK$140,000 for each of the first to ninth children from 2026/27, with higher dependent parent and grandparent allowances, and extended the additional child allowance for newborns from one year to two for children born on or after 1 April 2025. A one-off 100% reduction of 2025/26 salaries tax, capped at HK$3,000 per case, was also enacted in May 2026. Deductions include mandatory MPF contributions up to HK$18,000 a year, tax deductible voluntary MPF contributions and qualifying deferred annuity premiums up to HK$60,000 combined, domestic rent and home loan interest generally up to HK$100,000 each (HK$120,000 in certain cases where the taxpayer lives with a child born on or after 25 October 2023), and self-education expenses up to HK$100,000, each subject to conditions. Rates, allowances and caps are set each year, so they should be rechecked for the year in question.
Hong Kong does not tax individuals on capital gains, on dividends or on interest from bank deposits, and estate duty was abolished for deaths on or after 11 February 2006. There is no gift tax, wealth tax, VAT or general sales tax. That said, profits from a trade or business carried on in Hong Kong, which can include frequent trading in property or securities in some circumstances, can be within profits tax, and the line between an investment gain and a trading profit depends on the facts. Stamp duty applies to transfers of Hong Kong stock, generally 0.1% payable by the buyer and 0.1% by the seller on the consideration or value, so 0.2% in total for each transaction, and to property transactions, as explained below. Because Hong Kong does not tax gains, some expats assume that gains made while living there are free of tax everywhere. That is not always the case for British expats who later return to the UK, as the UK section of this guide explains. Our guide to tax in Australia for expats covers a country where gains and worldwide income are taxed, for comparison.
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Most employees aged 18 to 64 in Hong Kong must join the Mandatory Provident Fund. Employer and employee each contribute 5% of relevant income, with relevant income capped at HK$30,000 a month, so the maximum mandatory contribution is HK$1,500 a month each, and employees earning less than HK$7,100 a month do not contribute themselves although the employer still does. Some expats are exempt, including people who enter Hong Kong for employment for not more than 13 months and people who come to Hong Kong for employment and are covered by an overseas retirement scheme, and members of exempted occupational retirement schemes are also outside the MPF, so it is worth checking how your employer's arrangements work. Benefits are generally preserved until age 65, but the Mandatory Provident Fund Schemes Authority lists permanent departure from Hong Kong as a ground for early withdrawal: a member must make a statutory declaration that they have left or will leave Hong Kong to live elsewhere with no intention of returning to work or settle as a permanent resident, and provide evidence that they can reside outside Hong Kong. Claims are made through the eMPF Platform, and the MPFA states that a member who has withdrawn on this ground will not be paid again on a later application on the same ground. Withdrawal is not compulsory, and whether to withdraw, keep the benefits invested in Hong Kong or do something else depends on your circumstances, currency, costs and the tax position in your next country of residence. In Hong Kong, MPF benefits relating to mandatory contributions are generally exempt from salaries tax, while the treatment of benefits from employer voluntary contributions depends on the circumstances of withdrawal and length of service, as set out in IRD guidance. Under the treaty's pensions article, which includes lump sum payments, a payment arising in Hong Kong to a UK resident in consideration of past employment is taxable only in Hong Kong, and whether a particular MPF payment falls within that article should be confirmed with a tax specialist before you take it after returning to the UK.
Since 11am on 28 February 2024, the Special Stamp Duty, the Buyer's Stamp Duty and the New Residential Stamp Duty have been reduced to 0%, so expats who are not Hong Kong permanent residents now generally pay the same ad valorem stamp duty on a residential purchase as permanent residents. Ad valorem stamp duty rises in bands with the price, from HK$100 on the lowest values, and the 2026-27 Budget measures include a higher top rate for residential property above HK$100 million, stated by the IRD to apply to instruments executed on or after 26 February 2026, so the current scale should be confirmed with the IRD or a Hong Kong lawyer before a purchase. Owners pay rates, which for domestic property have been charged progressively since January 2025 at 5% on the first HK$550,000 of rateable value, 8% on the next HK$250,000 and 12% above that, according to the Hong Kong government, and government rent may also apply. If you let a Hong Kong property, property tax is charged at the standard rate, 15%, on the net assessable value, which is broadly the rent less rates paid by the owner and a 20% statutory allowance for repairs and outgoings. Mortgage interest is deductible only for an eligible owner who elects personal assessment. A gain on selling a property you have held as an investment is not generally taxed in Hong Kong, but the trading question above can apply. If you later return to the UK while still owning it, the rent and any gain can come within UK tax, with credit for Hong Kong tax under the treaty, and a Hong Kong property can be within the UK inheritance tax estate of a long-term UK resident.
The UK and Hong Kong double taxation agreement was signed on 21 June 2010, entered into force on 20 December 2010 and has effect in the UK from 6 April 2011 for income tax and capital gains tax and in Hong Kong from 1 April 2011, according to HMRC's Double Taxation Relief Manual (DT9200), and it has since been modified by the OECD Multilateral Instrument. Its pensions article, Article 17 in the text published on GOV.UK, provides that pensions and other similar remuneration, including a lump sum payment, arising in one party and paid to a resident of the other in consideration of past employment or self-employment, and social security pensions, are taxable only in the party where they arise. HMRC's treaty summary (DT9203) lists both government and other pensions under Article 17 as taxable only in the source state. On that wording, and where the recipient is resident in Hong Kong for treaty purposes, UK private and workplace pensions, UK government service pensions, lump sums and the UK State Pension paid to a Hong Kong resident are taxable only in the UK, and Hong Kong does not tax them. That is different from treaties such as those with Qatar or Saudi Arabia, so an NT code under the treaty is not normally available. HMRC's view of a particular payment should still be confirmed, and no tax outcome is guaranteed. In practice UK schemes apply PAYE, the first flexible withdrawal can be taxed on an emergency basis with any overpayment reclaimable from HMRC, and the tax-free element of a lump sum follows the UK lump sum allowance rules, as our guide to the tax-free lump sum when you live abroad explains. British nationals who are not UK resident are generally entitled to the UK personal allowance, £12,570 for 2026 to 2027, and the disregarded income rules can limit UK tax on some other UK income, as our guide to UK income tax for expats abroad explains. The timing and size of withdrawals can therefore affect the UK tax paid, and how and when to draw benefits depends on individual circumstances. The State Pension can be paid to you in Hong Kong, but annual increases are paid only in the EEA, Gibraltar, Switzerland and certain countries with a social security agreement that provides for them, and Hong Kong is not one of them, so while you live there it is generally not increased. Our guide to drawing your UK pension while living abroad covers the mechanics.
The 25% overseas transfer charge can apply when a UK pension is transferred to a qualifying recognised overseas pension scheme (QROPS). For transfers requested on or after 30 October 2024, when the broad exclusion for transfers within the EEA and Gibraltar was removed, it applies unless an exclusion applies, such as the member being tax resident in the same country in which the receiving scheme is established, the receiving scheme being an occupational pension scheme where the member is an employee of a sponsoring employer, or certain international organisation and overseas public service schemes. The charge can apply later if a residence based exclusion stops applying during the relevant period after the transfer, broadly the rest of that tax year and the following five tax years, a repayment of the charge may be possible if an exclusion comes to be met during that period, the receiving scheme's QROPS status needs checking at the transfer date, and a completed transfer is normally irrevocable. Because the treaty gives the UK the taxing right over UK pensions, how payments from an overseas scheme after a transfer would be taxed needs separate analysis of the receiving scheme, the source of payments and the rules in each country, and a transfer can mean giving up UK scheme protections and features and involves costs, investment risk and currency risk, so a transfer is not suitable for everyone and retaining a UK pension is also an option. The standard Overseas Transfer Allowance, £1,073,100 for 2026 to 2027 and different where certain protections apply, is tested separately, and the overseas transfer charge and the tax on transfers above the allowance are alternative charges, not cumulative ones, as our guide to the Overseas Transfer Allowance and the 25% charge explains. For the UK State Pension, the option to pay voluntary Class 2 National Insurance contributions for periods abroad was removed from 6 April 2026, and new applications to pay voluntary Class 3 contributions for periods abroad generally require either 10 continuous years of UK residence or 10 years of UK National Insurance contributions actually paid, with credits and voluntary contributions for periods abroad generally not counting, subject to limited transitional arrangements, so check your record and the current rules on GOV.UK. From 6 April 2027, most unused pension funds and death benefits are legislated to come within UK inheritance tax, with exclusions including death in service benefits from registered schemes and certain dependants' scheme pensions, as our guide to inheritance tax on pensions from April 2027 explains. Whether to retain, transfer or access a pension depends on individual circumstances and needs personalised regulated advice.
Because salaries tax is source based, Hong Kong residence matters mainly for personal assessment and for treaty purposes. Under Article 4 of the treaty, an individual is a Hong Kong resident if they ordinarily reside in Hong Kong, or stay there for more than 180 days in a year of assessment or more than 300 days in two consecutive years of assessment, one of which is the relevant year. If someone is resident in both places, the tie breaker looks at where they have a permanent home, then their centre of vital interests, then their habitual abode, after which the competent authorities decide by mutual agreement. The IRD can issue a certificate of resident status for treaty claims, and HMRC may ask for evidence of Hong Kong residence. UK residence is decided separately under the Statutory Residence Test. Someone leaving the UK to work full time in Hong Kong may meet the automatic overseas test for full time work abroad if they work sufficient hours overseas, averaging 35 hours a week on HMRC's calculation, with no significant breaks, spend fewer than 91 days in the UK in the tax year and work in the UK for more than three hours on fewer than 31 days, and split year treatment may apply in the year of departure, as our guide to the Statutory Residence Test and split year treatment explains. Keeping a home available in the UK can affect both UK residence and the treaty tie breaker.
If you are leaving Hong Kong for more than one month, your employer must notify the IRD on form IR56G at least one month before your expected departure date and must generally withhold payments due to you for one month from the notice, or until the IRD issues a letter of release, whichever is earlier, according to the Community Legal Information Centre. You will normally receive a final tax return, and the letter of release is issued once the tax demanded has been paid. Bonuses, share awards vesting or options exercised after departure can still be taxable in Hong Kong if they relate to Hong Kong employment, and the IRD should be told about them. Planning the timing of departure, final pay and any MPF claim together can avoid delays, and Hong Kong tax returns and clearance are work for a Hong Kong tax specialist.
Moving to Hong Kong does not end UK tax on UK income. Under the treaty's immovable property article, UK rental income can be taxed in the UK, and the Non-Resident Landlord Scheme may apply, as our guide to the Non-Resident Landlord Scheme explains. A sale of UK property or land is within UK capital gains tax for non-residents, with a UK return generally due within 60 days of completion even where no tax is due, as our guide to selling a UK property as a non-resident explains. Under Article 11, UK interest beneficially owned by an individual resident in Hong Kong is taxable only in Hong Kong, which does not tax bank interest, and Article 10 exempts dividends from tax in the paying company's country except for certain property investment vehicle dividends, where tax is capped at 15%. Gains on other assets, such as listed shares and funds, are taxable only in the country of residence under Article 13, apart from gains on UK land and certain shares deriving their value mainly from UK land. That does not switch off the UK temporary non-residence rules. Broadly, if you had sole UK residence for the whole or part of at least four of the seven tax years before the year you left and your period without sole UK residence lasts five years or less, certain gains and income realised while you were away can be taxed in the UK in the year you return, and HMRC's Capital Gains Manual (CG26700) says a gain within these rules is charged unaffected by a double taxation agreement. If you return after a longer absence, the UK's four year foreign income and gains regime, which since 6 April 2025 has been available to people who become UK resident after at least 10 consecutive tax years of non-residence, may be relevant, and the year of arrival needs planning, as our guide to returning to the UK after years abroad explains. The treaty does not cover inheritance tax, and Hong Kong has no estate duty, but since 6 April 2025 UK inheritance tax on worldwide assets depends on long-term UK residence: broadly, someone UK resident for at least 10 of the previous 20 tax years, with that status continuing for between 3 and 10 tax years after leaving depending on residence history, while UK assets remain within UK inheritance tax regardless, subject to exemptions and reliefs. Wills covering assets in each place should be reviewed with legal advice in each jurisdiction, as our guide to UK inheritance tax for British expats in the UAE explains in a Gulf context. Whether any change to how your income or assets are held is appropriate depends on your circumstances, and advice may conclude that no change is suitable.
People moving to Hong Kong often hear that there is no tax on gains, dividends or pensions and take that to mean nothing is taxed anywhere. On the Hong Kong side that is broadly right for investment income, but UK rent, UK property and UK pensions stay within UK tax under the treaty, and a stay of five years or less can bring some gains back into UK tax on return. Residence in each place for the year of the move is usually one of the first points to establish. This is general information, not personal advice, and whether any action is appropriate depends on your circumstances.
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Hong Kong does not tax capital gains, but UK property gains remain within UK tax, and the UK temporary non-residence rules can charge some gains in the year you return if you are away for five years or less.
Unlike the UK's treaties with Qatar and Saudi Arabia, the UK and Hong Kong treaty gives the UK the taxing right over UK pensions and lump sums paid to people resident in Hong Kong for treaty purposes, so UK tax will normally be deducted under PAYE.
The 60 day visits rule does not apply to directors' fees from Hong Kong companies, and whether employment is Hong Kong or non-Hong Kong employment changes what is taxable.
Employers must notify the IRD at least one month before you leave and generally withhold payments until a letter of release is issued, so late notice can delay your final pay.
A permanent departure withdrawal can generally only be paid once on that ground, and how the payment is treated after you return to the UK should be confirmed before you claim.
Long-term UK residents can stay within UK inheritance tax on worldwide assets for up to 10 tax years after leaving, and UK assets remain within it regardless.
Expats in Hong Kong commonly ask whether their UK pension can be paid without UK tax. Under this treaty UK pensions and lump sums paid to someone resident in Hong Kong for treaty purposes are taxable only in the UK, which is different from some other treaties, and a transfer to an overseas scheme may be subject to the 25% overseas transfer charge unless an exclusion applies. Whether to keep, transfer or draw a pension depends on individual circumstances. This is general information, not a recommendation, and any decision needs individual advice.
Illustrative example only, not a real client. This example is simplified and fictional, applies the Hong Kong rules for 2026/27 and the UK rules for 2026 to 2027 described in this guide as stated assumptions, ignores currency movements and costs, and is not a guarantee of any outcome. It does not describe advice given to any client, does not represent the experience of actual clients and does not illustrate a recommended course of action. Daniel and Emma are British and moved from London to Hong Kong in August 2026, where Daniel has a three year contract with a Hong Kong employer that provides a flat. They let their London flat, Daniel has two UK workplace pensions and a portfolio of shares and funds in the UK, and Emma has a UK personal pension. Both are above the UK normal minimum pension age, currently 55 and legislated to rise to 57 from 6 April 2028. They had heard that Hong Kong does not tax gains or pensions and assumed, wrongly as it turned out for a UK pension, that drawing Emma's pension and selling some of Daniel's shares while they lived there would be tax free, and they plan to return to the UK when the contract ends.
In this fictional example, a hypothetical review by a regulated financial adviser, working alongside UK and Hong Kong tax specialists, would consider the following points on these assumptions. Daniel's salary would be within Hong Kong salaries tax, with the employer provided flat generally taxed on a rental value of 10% of his other employment income rather than the actual rent. The London rent would remain taxable in the UK. Any payment from Emma's personal pension, which she is old enough to access under the scheme rules, would remain taxable only in the UK under the treaty, so the UK personal allowance and PAYE would be relevant and an NT code would not normally be available. Gains on Daniel's shares would not be taxed in Hong Kong, but because they expect to be away for about three years, the temporary non-residence rules could bring gains realised while they were away into UK tax in the year they return. Their UK residence in the year they left, Daniel's MPF position on leaving and their UK inheritance tax position would also need checking. No course of action is recommended.
Illustrative outcome only: this does not assess suitability or recommend any course of action, and no tax outcome, liability or saving is guaranteed. On these assumptions, the points that would need consideration include which income would remain taxable in the UK, the UK tax on any pension withdrawal, the effect of returning to the UK after five years or less of non-residence, and the treatment of Daniel's MPF benefits on departure. Whether any change to their pensions or investments would be appropriate is a separate question needing its own suitability assessment and tax advice, and advice may conclude that no changes are suitable. Different facts, such as a longer stay in Hong Kong, could produce a very different result.
Illustrative example, not a real client.
Clarity Global Wealth helps British expats living in Hong Kong, moving there or planning their next move understand how Hong Kong and UK tax rules could apply to their income, pensions, investments and estate before they act. Clarity Global Wealth is an introducer that provides information and introductions only, does not itself give financial advice and does not assess the suitability of any product or course of action, and an introduction is not a recommendation. We can arrange a free introduction to regulated financial planning with a separate regulated financial adviser; the introduction is an initial conversation, not advice, does not itself create an adviser and client relationship, and places you under no obligation to proceed with advice or any product, so you can review your position with a regulated financial adviser where advice is appropriate. Any charges for advice would be explained to you before you proceed. The value of investments and pension funds can fall as well as rise, tax treatment depends on individual circumstances and can change, and advice may conclude that no changes are suitable. Clarity Global Wealth does not provide tax, legal or accounting advice, and adviser comments in this guide are general information, not personal recommendations. Hong Kong and UK tax returns, treaty claims and tax opinions are work for qualified tax specialists, so where that is needed we coordinate with them.
Related guides: Tax in Australia for Expats, Moving From the UK: The Statutory Residence Test, UK Income Tax for Expats Abroad, Drawing Your UK Pension While Living Abroad, The Overseas Transfer Allowance and the 25% Charge, The Non-Resident Landlord Scheme, Inheritance Tax on Pensions from April 2027 and Returning to the UK After Years Abroad.
This guide is provided for general information only and reflects our understanding of the rules as at the date of publication. It is not personal financial, investment, pension or tax advice, and should not be relied upon as such. Rules and tax treatment can change and depend on your individual circumstances and country of residence. You should always seek regulated advice specific to your situation before taking action.
Yes, on employment income from Hong Kong. Salaries tax is charged at the lower of progressive rates from 2% to 17% on net chargeable income and a standard rate of 15% on the first HK$5 million of net income and 16% above that. Hong Kong does not generally tax individuals on capital gains, dividends or bank interest, although trading profits can fall within profits tax.
The basic allowance is HK$145,000, the married person's allowance HK$290,000, the single parent allowance HK$145,000 and the child allowance HK$140,000 for each of the first to ninth children, following legislation passed on 13 May 2026. Recheck the figures each year.
Under Article 17 of the UK and Hong Kong treaty, UK pensions, including lump sums and the State Pension, paid to someone resident in Hong Kong for treaty purposes are taxable only in the UK. Hong Kong does not tax them, and a treaty NT code is not normally available. Workplace and private pensions usually have UK tax deducted under PAYE, while the State Pension is paid without tax deducted and any UK tax due on it is collected in another way, such as through self assessment.
Permanent departure from Hong Kong is a ground for early withdrawal. You must make a statutory declaration that you are leaving to live elsewhere with no intention of returning to work or settle, and provide evidence that you can reside outside Hong Kong. Withdrawal is optional, and the UK treatment after you return should be confirmed first.
Generally yes, in the sense that it is not increased. It can still be paid in Hong Kong, but annual increases are paid only in the EEA, Gibraltar, Switzerland and certain countries with a social security agreement that provides for them, and Hong Kong is not one of them.
No. Hong Kong abolished estate duty for deaths on or after 11 February 2006 and has no gift tax. UK inheritance tax can still apply to long-term UK residents for up to 10 tax years after leaving, and to UK assets regardless.
Yes. The treaty allows the UK to tax income from UK property, so UK rental profits remain within UK tax and the Non-Resident Landlord Scheme may apply. Gains on UK property are also within UK tax, with a return generally due within 60 days of completion.
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