Hong Kong to Increase Preferential Tax Treatment for Dependent Family Members

February 28, 2011 Posted by China Briefing Reading Time: 2 minutes

Feb. 28 – The Financial Secretary of Hong Kong John Tsang presented the 2011-12 government budget on February 23, 2010, in which he proposed to increase the allowance for maintaining dependent parents/grandparents by 20 percent.

This would increase the allowance for maintaining dependent parents/grandparents aged 60 or above from the present HKD30,000 to HKD36,000, while the additional allowance for taxpayers residing with these parents/grandparents throughout the year will also be increased from HKD30,000 to HKD36,000.

The allowance for maintaining dependent parents/grandparents aged 55 to 59 will be increased from the current HKD15,000 to HKD18,000. The same increase applies to the additional allowance for taxpayers residing with these parents/grandparents throughout the year.

For taxpayers whose parents/grandparents are admitted to a residential care home, the deduction ceiling for elderly residential care expenses will be raised from the current HKD60,000 to HKD72,000.

It is estimated that this measure will benefit about 510,000 taxpayers and cost the Hong Kong government HKD570 million a year.

In addition, Tsang also proposed to raise both the child allowance and the additional one-off child allowance in the year of birth by 20 percent from HKD50,000 to HKD60,000 respectively for each child.

It is estimated that this measure will benefit about 300,000 taxpayers, costing the government HKD650 million a year.