⚠ Employer IR56B May Not Correctly Report Your Share Income
Many employers include share award income on IR56B at face value without applying cross-border apportionment. This means you may be assessed on a higher HK-sourced amount than is correct. You must proactively claim the correct apportioned figure in your own BIR60 filing — the IRD will not automatically adjust the employer-reported figure.
Common Challenges
Timing of Taxation at Vesting
RSUs and restricted share awards are taxed at the date of vesting (or date of lifting of restrictions), not at grant. The taxable amount is the market value on the vesting date.
⚠ Risk: Reporting at grant price instead of vesting price → IRD adjustment + interest
Cross-Border Apportionment
If you were employed in multiple countries during the vesting period, only the HK-service proportion of the award is taxable in HK. Many employees never claim this apportionment.
⚠ Risk: Paying full HK tax on awards earned partly offshore → significant overpayment
Foreign Currency Share Awards
USD or GBP denominated shares must be converted to HKD at the Bank of England / HKMA rate on the vesting date for correct reporting.
⚠ Risk: Wrong FX rate → incorrect assessable amount
Multiple Vesting Tranches
Annual or quarterly vesting schedules create multiple taxable events in a single assessment year, each requiring separate calculation.
⚠ Risk: Missing vesting events → underreporting and back-assessment
Who Is This For?
Tech and finance professionals with RSU packages
Employees of multinationals receiving annual RSU grants as part of their compensation.
Employees relocated to HK mid-vesting-period
Staff who received share grants before moving to HK and are now vesting in HK.
HK employees being transferred abroad
Those leaving HK before their RSUs vest, needing to understand future HK tax obligations on remaining grants.
ESOP participants at pre-IPO companies
Holders of employee share options at companies approaching an IPO or acquisition event.
Directors with share award schemes
Executive directors receiving phantom shares, share appreciation rights, or deferred share awards.
What We Do
Vesting Event Tax Calculation
We calculate the assessable value of each RSU/share award vesting event using correct market values.
Including FX conversion at correct rates
Cross-Border Apportionment Analysis
We calculate the HK-service proportion of each award based on your employment history during the vesting period.
Day-count or period-of-service methodology per DIPN 38
BIR60 Share Income Reporting
We report all share income correctly in your annual return, overriding any incorrect IR56B employer reporting.
With supporting schedule showing each vesting event
Stock Option Exercise Planning
For share options, we model the tax impact of exercising in different years and help you time your exercise optimally.
Particularly valuable near retirement or departure from HK
IRD Query Response
We respond to IRD enquiries about share income with fully documented apportionment calculations.
Including employer grant letters and vesting schedules as evidence
How It Works
Grant & Vesting Schedule Review
1 dayWe collect all equity award agreements, grant letters, and vesting confirmations.
Apportionment Calculation
2–3 daysWe calculate the HK-service proportion of each award using your employment history.
Tax Return Schedule Preparation
2 daysWe prepare a detailed schedule of all vesting events with assessable HK amounts.
BIR60 Filing & Documentation
1 dayWe file your return with all supporting documentation retained for potential IRD enquiry.
Case Studies
Technology VP relocated from US to HK mid-vesting
- •RSU value vested in HK: USD 180,000 equivalent
- •3-year vesting; 1 year US service / 2 years HK service
- •HK-assessable portion: 2/3 of award
- •Correct apportionment filed vs employer-reported 100%
“TAX.hk saved me from paying HK tax on income I earned while I was still living in the US.”
Finance Director with quarterly RSU vesting + options
- •12 RSU vesting events in tax year
- •Share options exercised twice in same year
- •FX conversion errors corrected on employer IR56B
- •Full apportionment analysis filed with supporting schedule
“The complexity of multiple vesting events would have taken me weeks. TAX.hk handled it all systematically.”
Frequently Asked Questions
When exactly am I taxed on my RSUs in Hong Kong?
RSUs (Restricted Stock Units) are taxed at the date of vesting — the date the shares are released to you and any restrictions lift. The assessable amount is the market value of the shares on that date, not the grant price or award price. If you have multiple vesting dates in a year, each is a separate taxable event.
I was in the UK when my RSUs were granted but moved to HK 2 years later. Do I pay HK tax on the whole RSU value?
No — only the HK-service portion is assessable in HK. The award is apportioned based on where you were employed during the vesting period. For a 4-year vesting schedule where you spent 2 years in the UK and 2 years in HK, approximately 50% of the award would be HK-sourced (subject to exact day-count calculation). The UK portion is outside HK salaries tax.
My employer's IR56B shows the full RSU value. Should I just accept that?
No. If you have a cross-border apportionment entitlement, the IR56B may overstate your HK assessable income. You should file your BIR60 declaring the correct apportioned amount, attaching a schedule explaining the calculation. The IRD may initially issue an assessment based on the IR56B, but you can object and provide the correct figures.
I have share options I haven't exercised yet. Am I taxed now?
Under s.9(1)(d) of the IRO, share options are generally taxed at the time of exercise (for options granted from 1 April 2003 onwards). The taxable amount is the excess of the market value over the exercise price on the exercise date. Options that have not yet been exercised are not yet taxable.
What records do I need to keep for my RSU/share option tax?
Keep all grant agreements, vesting confirmations, share sale confirmations (showing market price on vesting date), employer statements of share income, and records of where you were working during the vesting period. The IRD may request these for up to 6 years after the relevant assessment year.
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