Experts call for stronger tax reliefs for individuals, enhanced family office tax breaks

An expanded family office tax concession regime seen propelling the city as global capital hub.

Raising the ceiling on salaries tax rebate and increasing allowances are just some measures the government can consider in the 2024-25 budget to provide a stronger financial cushion to families, according to CPA Australia.

Adam Chiu, a member of CPA Australia’s taxation committee for Greater China, said the ceiling set for the 100% reduction in salaries tax should be increased to $10,000, from the proposed cap of $3,000 as Hong Kong citizens continue to face financial pressures. 

To further help families, Chiu said the government should increase the basic allowance and other allowances applicable to parents, as well as consider introducing a tax deduction for childcare expenses of up to $60,000.

“Under the high interest rates environment, the middle class is under significant financial pressure,” he said, noting that they support the plan to expand the After School Care Programme to cover all districts in Hong Kong.

The suggestions were made in response to the string of tax measures unveiled during Financial Secretary Paul Chan’s budget speech on Wednesday.

READ MORE: Budget 2024-25: Gov’t cuts salaries and profits taxes
 
Meanwhile, PwC Private Clients and Family Office Services Tax Partner Agnes Wong, cheered on the government’s plan to review its family office tax concession regime to boost the city’s appeal as a financial hub. 

Wong suggested the scope of the regime be expanded to include alternative assets like virtual assets, wine, fine arts and collectibles. At the same time, the restrictions on interest income to quality for the tax break should also be relaxed. 

“The Government should also consider giving Hong Kong residency status to the principal family member in charge of a qualified family office and his/her immediate family members, which would encourage long-term commitment in Hong Kong,” Wong added.