Tax clearance before leaving HK

We are due to leave HK in July.


I am trying to calculate how much tax we will have to pay before we go, I am able to calculate 2005/06 easily as we have my husbands p60, however he will be paid up until the end of August and will also receive a gratuity, if I am calculating for the 2006/07 year do I include all of the yearly tax allowances or just pro rata? At the moment with the amount of provisional tax we paid last year my calculations say that we are owed lots of $$$ by the IRD, can that be right??

The question of pro-rating allowances is complex: there have been appeals on this. I seem to remember one case where a taxpayer had married just before the end of a tax year and they would not give him any part of the single parent allowance for that year, even though he had been a single parent for most of it.



Tax clearance itself is a super-efficient process: you go to a special desk on the first floor of Revenue Tower with all your tax-related forms/docs; they help you fill in the forms; you go back one or two days later and they tell you what you owe/are owed.



Unless the gratuity is huge or hubby's salary was much higher this year than last, you are probably owed a refund.



One issue you may have is whether the gratuity is tax-exempt or not. That is a complex area, but basically comes down to whether it's payment for work done (like a bonus, so taxable) or payment for having your contract terminated (generally not taxable).

we reaklise that we still have a full year to pay (2005/06) this amount is however covered by the provisional tax paid last year, I am sure that we are exempt from paying provisional tax n 2006/2007 as my husbands employers will have notified the tax office that we are leaving and they will also put in a tax return for the 2006/07 year before we go.

Even if they do send you a demand for provisional tax, it doesn't matter... you just fax them a "Request for holdover of Provisional Tax" form (available on the ird website) and they cancel the demand the next day.