ND
REVENUE
Inland Revenue
Personal Tax Division
(Schedule E)
HKA 233/1
RECEIVED INF
Bridget Paris
Hong Kong Department
Foreign & Commenwealth Office
LONDON
SW1A 2AH
Sapphire House
550 Streetsbrook Road So ihull
B9] 1QU
Telephone 021 711 3232
Ext: 2244
REGISTRY
14 JAN 1993
DESK OFFICER
INDEX
FA
Action Taken.
Your reference
Our reference SAP 128/PMB/585
Date
January 1993
Dear Ms Paris
HONG KONG HMOCS OFFICERS:
COMPENSATION PAYMENTS
650) HKA 233/1 (1992), I thank you for your letter of 10 December and refer also to our telephone conversation of 23 December.
As I explained to you I can only give a definitive answer to the taxation of the proposed compensation payments with the benefit of further background information. I have spoken with Alan McDonald of ODA and he has agreed to send me sample documentation relating to a former compensation scheme together with the legal authorities under which such schemes are set up*
Meanwhile I should be grateful if you could assist by answering the following questions:
+
1) Am I correct in understanding (as Alan McDonald
has indicated) that these individuals hold employment with the Hong Kong Government, rather than the Crown, in respect of the duties which they perform in Hong Kong and that the remuneration which they receive for those duties is wholly payable by the Hong Kong Government?
2) Am I also right in assuming (which would seem to follow from 1, above) that the remuneration is subjected only to local Hong Kong income tax and not to any form of United Kingdom income tax?
3) As the compensation payments in this particular instance are to be funded by HMG, who will administer the compensation scheme? Will it be administered from the UK by HMG or will it be administered by the Hong Kong Government with funds provided by HMG?
4) Am I correct in understanding (as Alan McDonald indicated in his fax of 29 April to John Payne) that compensation is envisaged for two distinct groups of
* now received.
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