Hong Kong's family office tax bill is still moving, and officials are considering widening it again
The Financial Times reported on 11 August that Hong Kong officials are weighing extending the reliefs in its pending funds and family office tax bill to proprietary trading firms. The bill is still before the Legislative Council.
Hong Kong is considering extending the tax reliefs in its pending funds and family office bill to proprietary trading firms such as Jane Street and Citadel Securities, the Financial Times reported on 11 August, in an account relayed by Private Banker International.
Two people familiar with the process told the FT that officials are weighing changes to the draft legislation so that employees of proprietary trading firms would not be taxed on performance-related pay. An alternative under discussion is to issue guidance confirming that traders qualify for the break, rather than amend a bill already before the Legislative Council. Any relief may not cover every proprietary trading firm.
What the bill actually does
The measure is the Inland Revenue (Amendment) (Preferential Tax Regimes for Funds, Family-owned Investment Holding Vehicles and Carried Interest) Bill 2026, gazetted on 12 June 2026 and given its first reading in the Legislative Council on 24 June, according to Deacons and Baker McKenzie.
It reworks three existing regimes at once: the unified profits tax exemption for privately offered funds, the profits tax concession for family-owned investment holding vehicles managed by eligible single family offices, and the profits tax and salaries tax concession on carried interest. The enhanced regimes are drafted to apply retrospectively from 1 April 2025, that is from the 2025/26 year of assessment.
The broadest change concerns carried interest. Hong Kong proposes to let gains from a wider range of investments qualify for carried interest treatment instead of confining it to private equity transactions. If enacted in that form, the treatment would reach hedge funds, private equity, venture capital, private credit and family offices, giving firms more room to structure themselves in ways that reduce their Hong Kong tax liability.
Why families should watch the committee stage, not the headlines
The bill was introduced with the stated aim of attracting more funds and family offices to establish a presence in Hong Kong. That objective has not changed. What the August reporting shows is that the scope is still being argued over while the bill sits in committee, and that officials are prepared to keep adding categories of beneficiary before it passes.
For a single family office weighing a Hong Kong vehicle, the practical consequence is that the eligibility conditions are not yet fixed. Advice given against the June text may not match the version that is eventually enacted, and the retrospective start date means the final wording will govern periods already in progress.
The competitive backdrop is doing some of the work here. Singapore policymakers are considering their own reductions amid concern that portfolio managers could move to Hong Kong, according to the same FT account. Hong Kong is also competing with New York and Miami for senior investment staff.
On the scale of what is at stake, Boston Consulting Group’s Global Wealth Report 2026, published in May, found that Hong Kong became the world’s largest cross-border wealth hub in 2025, passing Switzerland for the first time. Cross-border wealth booked in Hong Kong rose 10.7 per cent to $2.9 trillion, helped by inflows from mainland China, strong IPO activity and equity market gains. Global financial wealth also grew 10.7 per cent, to $333 trillion.
Whether the drafting stretches to proprietary traders is a question for the Legislative Council. For families, the more useful signal is that Hong Kong is still rewriting the terms on which it will host their structures.