Hong Kong taxes for Brits: the UK link and pension

Hong Kong taxes your salary lightly and leaves most other income alone. The hard part isn't the Inland Revenue Department in Wan Chai; it's leaving HMRC properly and knowing what happens to the money you still have back home.

The short version

Hong Kong taxes on a territorial basis: salaries tax falls on income from a Hong Kong job, not on your worldwide income. Progressive rates run from 2% to 17%, and nobody pays more than the standard rate of 15% (16% on net income above HK$5 million) [5][6].
The Hong Kong tax year runs 1 April to 31 March, five days out of step with the UK's 6 April to 5 April [6].
Leaving the UK tax system depends on the Statutory Residence Test, not your Hong Kong visa. Tell HMRC with a P85 or the SA109 residence pages [2][3].
The 2010 UK–Hong Kong double taxation agreement says pensions, including lump sums and social security pensions, are taxed only in the country they come from [1].
Hong Kong isn't on the DWP's list of places where the State Pension is uprated, so it's frozen at the rate you get when you leave or first claim [4].

Pound conversions use the Bank of England spot rate of 5 November 2026 (£1 = HKD 10.5659).

How Hong Kong taxes residents

There are three income taxes in Hong Kong: salaries tax on employment income, profits tax on businesses and property tax on rent from Hong Kong property. For most Brits on an employment visa, salaries tax is the only one that matters. There's no capital gains tax, no tax on dividends, no VAT and no inheritance tax. Interest on your bank savings isn't taxed for individuals either, which feels almost suspicious after years of the UK's personal savings allowance.

What counts is where your job is. With a Hong Kong employment contract, all your earnings for that job are taxable, including most benefits such as housing provided by your employer. If your employment is based outside Hong Kong, the IRD looks at the days you actually work here, and a visitor whose job is done outside Hong Kong and who spends no more than 60 days here in a tax year is exempt [6].

Rates and allowances

Your net chargeable income (salary minus deductions and allowances) is taxed at these progressive rates, which have applied since 2020/21 [5]:

Net chargeable income (HK$)	Rate	Roughly in pounds
First 50,000	2%	first £4,730
Next 50,000	6%	£4,730–£9,460
Next 50,000	10%	£9,460–£14,200
Next 50,000	14%	£14,200–£18,930
Remainder	17%	above £18,930

You never pay more than the standard rate: 15% of your net income before allowances, or 16% on the part above HK$5 million (about £473,200), from 2024/25 [5]. A single person only gets near the standard rate zone at about HK$2.13 million a year (about £201,800) in 2026/27 [5].

Allowances went up from 2026/27 after the Budget legislation passed in May 2026 [7]:

Allowance	2025/26	2026/27
Basic	HK$132,000 (about £12,500)	HK$145,000 (about £13,700)
Married person's	HK$264,000 (about £25,000)	HK$290,000 (about £27,400)
Each child	HK$130,000 (about £12,300)	HK$140,000 (about £13,250)
Dependent parent aged 60+	HK$50,000	HK$55,000

The government also knocks 100% off 2025/26 final salaries tax, up to HK$3,000 (about £284) per case, automatically [7].

What this means in practice

Take a single Brit on HK$600,000 a year (about £56,800) in 2026/27, paying the maximum mandatory MPF contribution of HK$18,000. Net income is HK$582,000, minus the HK$145,000 basic allowance, leaves HK$437,000 to tax. That's HK$16,000 on the first HK$200,000 plus 17% of the rest: about HK$56,300 (about £5,330), or under 10% of salary. On the same £56,800 in England, income tax alone is about £10,150 in 2026/27, before National Insurance [8]. It's one of the reasons Hong Kong rent stings less than it first appears.

Our guide to salaries tax in Hong Kong and your UK split year covers deductions, provisional tax and the year you arrive.

Leaving the UK tax system properly

The UK taxes by residence, not citizenship. Your employment visa doesn't end UK residence; the Statutory Residence Test does, one tax year at a time.

Check the third automatic overseas test. If you work full-time in Hong Kong, spend fewer than 91 days in the UK in the tax year and work more than three hours in the UK on fewer than 31 days, with no significant break from your overseas work, you're non-resident for that year [3]. See the Statutory Residence Test explained.
Look at split-year treatment for the year you go, so that your Hong Kong salary from the day after you leave is outside UK tax. Our guide to split-year treatment has the cases.
Tell HMRC. If you're not in Self Assessment, fill in form P85 and include parts 2 and 3 of your P45. If you file returns, complete the SA109 residence pages. GOV.UK says you can't use HMRC's online services to report leaving [2].
Keep a day count. Christmas back in Blighty plus a summer of weddings can add up quickly.

The UK–Hong Kong double taxation agreement

The agreement was signed on 21 June 2010 and has applied to UK income tax since 6 April 2011 and to Hong Kong tax since 1 April 2011. It's been modified by the OECD Multilateral Instrument, and GOV.UK published a combined text in August 2025 [1].

Income	Who can tax it	Article
Your Hong Kong salary for work done in Hong Kong	Hong Kong (the UK too if you're still UK resident, with credit)	14
Rent from your flat in Bristol	The UK, where the property is	6
UK workplace and private pensions paid to you in Hong Kong	Only the UK	17
UK State Pension paid to you in Hong Kong	Only the UK	17
UK government pensions (civil service, forces)	The UK	17 and 18
Hong Kong pensions, including an MPF lump sum, paid to you once back in the UK	Only Hong Kong	17

Source: the 2010 UK–Hong Kong agreement [1].

The residence tie-breaker. If both places treat you as resident, Article 4 looks first at where you have a permanent home available, then where your personal and economic ties are closer, then your habitual abode [1]. Keeping your old house in Surrey furnished "just in case" can count against you.

How relief works. Where both can tax, Article 21 makes Hong Kong give credit for UK tax and the UK give credit for Hong Kong tax, each capped at its own tax on that income [1]. With Hong Kong's rates lower than the UK's, a UK resident usually ends up paying the UK rate.

Pensions are the big one. Article 17 says pensions and similar payments, "including a lump sum payment", arising in one place and paid to a resident of the other are taxable only where they arise [1]. That cuts both ways, and it's why our MPF guide matters if you'll go home one day. A tax adviser who knows both countries can check your situation before you draw anything.

Your UK State Pension in Hong Kong: frozen

The DWP pays the yearly increase only in the EEA, Switzerland and a short list of countries with an agreement that provides for it. Hong Kong isn't on it [4]. Your pension is paid at the rate you get when you first claim abroad, or when you leave if you already draw it, and stays there unless you come back to live in the UK.

The full new State Pension is £241.30 a week in 2026/27, up from £230.25 in 2025/26 [9]. Someone whose pension froze at the 2025/26 rate misses £11.05 a week, about £575 (about HK$6,070) this year alone, and the gap widens every April. Hong Kong doesn't tax it, and the treaty leaves it to the UK. Our guide to the State Pension abroad runs the long-term numbers and covers voluntary National Insurance.

Other UK income that follows you

UK rent. Still taxable in the UK, and you'll usually file a Self Assessment return [2]. Register for the Non-Resident Landlord Scheme with form NRL1 so your letting agent can pay rent without basic-rate tax taken off; see renting out your UK home.
Savings interest and ISAs. Taxable UK interest normally means a Self Assessment return [2]. You can keep an ISA but can't pay into it once non-resident; see ISAs when you move abroad.
Personal Allowance. British citizens can usually keep the UK Personal Allowance as non-residents, so modest UK income may be covered.
UK pensions. Under the treaty these stay with HMRC. Never move a UK pension to an overseas scheme without regulated financial advice; our guide to UK pensions abroad and the transfer warnings explains the overseas transfer charge and the scams.

Tax questions pop up often in our community group for Brits in Hong Kong, usually around May when the first tax return lands.

Hong Kong taxes for Brits: low rates, the 2010 treaty and your frozen State Pension