Hong Kong family-office tax concessions: how to prepare for the 2026 bill

01

Separate legislation, filing arrangements and the family’s decision

The Government gazetted the amendment bill on 12 June 2026. On 12 August, the Financial Services and the Treasury Bureau said clause-by-clause examination had been completed and that it then aimed to resume the second reading in the second half of the year. The measures were intended to apply from the year of assessment 2025/26, subject to passage. That dated update does not establish that the measures are in force today.

Checked again on 21 October, the IRD’s 2025/26 filing tips still describe filing on the basis proposed in the bill, require that basis to be stated in the tax computation and ask taxpayers to follow developments upon enactment. An administrative filing arrangement and enacted law are different. This article examines published proposals and preparation; any transaction or filing requires a check of the final law, applicable year and latest guidance.

02

Family assets may fall under different regimes

The amendments address funds, family-owned investment holding vehicles (FIHVs) and carried interest. A directly held family account, an FIHV managed by a single family office and an external fund in which the family invests do not share one tax analysis merely because the ultimate beneficiaries are the same. Identify the legal entity receiving each income stream before a tax professional determines the applicable regime.

The IRD’s explanation of the FIHV regime includes a HK$240 million minimum asset threshold and requirements for Hong Kong core income-generating activities, staff and expenditure. The staffing and expenditure minima are two qualified full-time employees and HK$2 million, but resources must also be adequate for the activities. Total family wealth cannot substitute for testing qualifying assets, actual management and the remaining conditions.

03

For credit investments, identify the legal rights

The Government’s second-reading speech on 24 June identified loans and private-credit investments, digital assets, precious metals and specified commodities among the proposed additions. A family holding direct loans therefore has reason to review the treatment. But “private credit” is a market label; the legal asset may be a loan, a fund interest, a bond or equity in an intermediate entity.

For illustration only, lending directly to a company and subscribing to a fund that owns loans both expose a family to borrower risk. The recipient of income and the rights held are different. Start with contracts, payment notices and ownership levels, separate interest, distributions and disposal proceeds, then test the relevant conditions. Similar asset labels do not establish identical tax treatment.

04

Removing the 5% threshold does not exempt every receipt

The Government proposes removing the 5% threshold for incidental transactions. The practical questions are which receipt was constrained by that threshold, and whether it still meets the relevant qualifying or incidental-transaction conditions after the change.

Removing a percentage limit does not cure an ineligible entity or income outside the concession. Compare current treatment, the proposed treatment and unresolved conditions for each income category. Applying a concessionary rate to the company’s entire income is not a defensible estimate of tax savings.

05

Economic substance needs more than a Hong Kong board minute

The Government proposes reporting and substance requirements for the unified funds regime similar to those for FIHVs. FIHVs already have substance requirements; these should not be described as newly introduced by this bill. A useful family review puts management agreements, staff responsibilities, decision records and cost allocations together to test whether they describe the same operation.

For example, if documents assign investment research to the Hong Kong team but overseas personnel actually perform all important assessments, negotiations and decisions, clarify the functions and evidence before adding a signed minute. This is a governance check, not a conclusion on whether a particular arrangement satisfies tax law.

06

Restructure only after identifying the actual difference

G70’s view is to retain the existing structure as the comparison baseline. Put the proposal scenario beside it, recording changes to income treatment, recurring operating costs, legal transfers, financing consents and other relevant taxes. A benefit dependent on an unverified condition should not be presented as a certain return.

The family can first complete its entity and asset inventory, locate missing agreements and assign responsibility for management records. Transfers or entity closures need written analysis from qualified professionals and clear conditions for execution. G70 can coordinate family priorities and professional providers; tax and legal advice and any regulated services are supplied independently by qualified or licensed providers separately appointed by the client.

G70

G70 coordination

Make the professional comparison actionable

The information supplied to advisers should answer these questions.

1. Which entity receives each income stream, under which contract?
2. Which differences between current law and the proposal are confirmed?
3. Do activity and cost records support the filing position?
4. Could restructuring costs and other taxes offset the expected benefit?

Sources

Official and primary sources

1. HKSAR Government | Bill gazetted — 12 June 2026
2. HKSAR Government | Second-reading speech — 24 June 2026 (Chinese)
3. IRD / FSTB | Legislative and carried-interest clarification — 12 August 2026
4. IRD | Filing tips for 2025/26 profits tax returns
5. IRD | FIHV tax concessions and conditions

Originally published on 5 August 2026. The primary sources listed were checked again and this article revised on 21 October 2026. Policies and information may subsequently change.