As globalization increases, relocating overseas for work or life has become common. Recently, more native Hong Kong residents with BN(O) passports are planning to migrate for better quality of life, living conditions, career opportunities, or education for their children.
Before moving, individuals must consider their objectives, whether temporary or long-term. For work-related relocations, take-home compensation and living standards are key. For family-driven moves, education quality and living conditions may take precedence. Understanding the tax residency rules and income taxation of the destination country is critical, as tax systems in places like the UK and US are more complex than Hong Kong’s.
Tax considerations before migration include:
- Is the move from Hong Kong permanent, or do you plan to return after a few years, e.g., after obtaining permanent resident status (like a US green card)?
- Are you familiar with the tax residency rules of the destination country, and what issues arise upon gaining permanent resident status?
- Will you frequently travel outside the destination country after relocating?
- Do you hold assets with realized gains that might be sold post-relocation?
- Do you own Hong Kong real estate, and will you keep or sell it? Are you planning to buy property in the new country?
- How will you generate income after the move, and where will you perform employment or business duties?
- Do you have succession plans, such as transferring assets to the next generation? Unlike Hong Kong, many countries impose estate/inheritance taxes.
- Are you entitled to estate income from your parents?
- Will there be future tax compliance obligations, such as filing tax returns, after the move?
Conclusion
Careful tax planning before relocating can minimize surprises from complex tax systems like those in the UK or US, which could negatively impact family wealth. Seeking tax advice should be a priority on the relocation checklist to allow ample time for planning and implementation.
