Election for Personal
Assessment
Personal assessment
does not always reduce tax payable. In some cases, electing for Personal
Assessment increases total tax payable. This usually happens when the
marginal tax rate under Salaries Tax exceeds the standard rate applicable to
Property Tax and Profits Tax. Below is my advice.
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In general, you should
elect for Personal Assessment in the following situations:
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You have property
income only.
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You have business
income only.
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You pay mortgage
interest on let-out property.
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You have business
losses and other incomes such as salaries, property income or business
profits.
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You do not have
employment income but business or property income, and you made approved
charitable donations.
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You do not have
employment income but business or property income, and you want to claim
self-education expenses, residential care expenses or home loan interest.
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In general, you should
not elect for Personal Assessment in the following situations:
-
You have employment
income only.
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You have employment
income and other incomes and your marginal tax rate under Salaries Tax
exceeds the standard rate.
-
Your business or
property income is so big that it will be taxed at standard rate under
Personal Assessment and you do not claim self-education expenses,
residential care expenses or home loan interest.
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Only the person meeting the
following conditions can elect for Personal Assessment:
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18 years old or
above, or under 18 if both parents have died; and
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A permanent or
temporary resident in Hong Kong. A permanent resident means one
ordinarily resides in Hong Kong. A temporary resident means one stays in
Hong Kong for more than 180 days in the year of assessment or for more
than 300 days in two consecutive years of assessment, one of which is
the year of assessment in question.
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Click here
to check if PA is to your
advantage
