CONFIDENTIAL
FM FCO
TO IMMEDIATE HONG KONG
TELNO 679
OF 211315Z APRIL 92
CONFIDENTIAL
HKA 233.
233/1
INFO PRIORITY UKREP JLG HONG KONG, PEKING
Ра
255
116312
TOP COPY Q DIST?
3204
MIPT: HMOCS: PREPARATIONS FOR DISCUSSIONS
1
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MIPT CANVASSED A NUMBER OF ISSUES RELATING TO PENSIONS. WE HAVE ALSO BEEN CONSIDERING TAX, DOUBLE BENEFITS AND THE POSSIBILITIES OF SUPERSESSION AFTER 1997.
TAX
2.
WE SHOULD BE GRATEFUL FOR YOUR COMMENTS ON THE TAX POSITION OF ANY PAYMENTS BY HMG IN THE COMPENSATION SCHEME. ARE PAYMENTS OF A COMPENSATORY OR INDUCEMENT NATURE (OUTSIDE HONG KONG TO PERSONS EARNING SALARY IN HONG KONG) TAXABLE IN HONG KONG? IN ORDER TO ENSURE THAT THE SAME POSITION APPLIED POST 1997, WOULD THERE NEED TO BE DISCUSSIONS WITH THE CHINESE?
ELIMINATION OF DOUBLE BENEFITS
3.
WE BELIEVE THAT WE SHALL NEED TO COORDINATE THE APPLICATION OF THE COMPENSATION SCHEME FUNDED BY HMG AND THE LIMITED COMPENSATION SCHEME FUNDED BY HKG IN RESPECT OF OFFICERS SUPERSEDED FOR PROMOTION. WE CONSIDER THAT, IF AN OFFICER HAS BENEFITED UNDER THE HONG KONG SCHEME BY RECEIVING COMPENSATION FOR SUPERSESSION, HE SHOULD NOT/NOT BE ELIGIBLE FOR ANY COMPENSATION UNDER OUR SCHEME. GRATEFUL FOR YOUR COMMENTS ON THIS AND YOUR ASSESSMENT OF THE HMOCS OFFICERS' REACTION.
SUPERSESSION AFTER 1997
4.
IT IS POSSIBLE THAT HMOCS OFFICERS MAY BE SUPERSEEDED AFTER 1997. ONE WAY OF MAKING PROVISION FOR THIS WOULD BE TO PROVIDE FOR YOUR SCHEME, SO FAR AS IT DEALS WITH THIS QUESTION, TO EXTEND BEYOND 1997 BUT TO TAKE ACCOUNT OF ANY PAYMENT MADE IN THE MEANTIME UNDER HMG'S SCHEME. AGAIN, THIS IS A QUESTION WHICH WOULD NEED TO BE DISCUSSED WITH THE CHINESE.
5. NO DOUBT YOU TOO WILL HAVE BEEN CONSIDERING WHAT OTHER ISSUES MAY BE RAISED BY HMOCS OFFICERS. WE SHOULD BE MOST GRATEFUL FOR YOUR THOUGHTS.
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