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If share option has been granted to you by virtue of your
employment or office in Hong Kong, a gain realized
from its subsequent exercise, assignment or release after
your permanent departure from Hong Kong is nonetheless chargeable
to Salaries Tax. Both you and your employer have
to report the share option gain even after your departure.
With a view to finalizing your salaries tax liabilities prior
to your departure, you may elect to have the liability ascertained
on the basis of a notional exercise of the option.
The Inland Revenue Department would calculate the gain as
if it is realized had the share option been exercised on a
day within 7 days before the date of submitting your tax return
for the year of assessment in which you permanently depart
from Hong Kong.
If you have not made such election before your departure,
the Inland Revenue Department is prepared to accept an election
made within 3 months from the date of permanent departure
from Hong Kong. In this case, the date of departure will be
taken as the date of the notional exercise for purposes of
calculating the gain.
In the event that you have a non-Hong Kong employment and
the option in question is a conditional one in respect of
which the vesting period has not expired on the date of notional
exercise, the gain would be calculated on the basis that the
vesting period would be deemed to end on that date.
Should you wish to make such an election, please attach a
statement to the tax return to the effect that the gain is
offered for assessment on the understanding that no further
liability will arise when the option is actually exercised,
assigned or released after departure from Hong Kong. On the
other hand, if the gain in respect of the actual exercise,
assignment or release subsequently turns out to be less than
the amount assessed in respect of the notional exercise, you
may apply for appropriate re-assessment based on the actual
gain.
For further details, please refer to the followings:
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