Tax Saving Notebook

港台中产 · 2025-11-25

Downloading the Correct Personal Assessment Form: IRD Links and Filing Calendar

For the tax year of assessment 2024/25, the Inland Revenue Department (IRD) will issue around 2.7 million BIR60 tax returns to individuals in the first week of April 2025. This marks the start of the filing season for Hong Kong’s salaries tax, profits tax, and property tax. For the estimated 300,000 taxpayers who file a Personal Assessment election each year—typically self-employed professionals, sole proprietors, and landlords with mixed income streams—the critical decision is not whether to file, but which form to use and how to structure the election to legally minimise the aggregate tax liability. The IRD’s recent modernisation of its eTAX platform, coupled with a tightening of the objection timeline under Section 64 of the Inland Revenue Ordinance (Cap. 112), means that downloading the correct form from the IRD website is no longer a clerical task but a strategic filing decision. A wrong election can lock a taxpayer into a less favourable basis of assessment for up to five years. This article provides the precise IRD links, the statutory deadlines for the 2025 filing calendar, and the operational logic for when a Personal Assessment election actually saves tax versus when it does not.

The Personal Assessment Election: When It Saves Tax and When It Does Not

Personal Assessment is not a separate tax. It is an election under Section 41 of the Inland Revenue Ordinance (Cap. 112) that allows an individual to aggregate all assessable income—salaries tax (Part III), profits tax (Part IV), and property tax (Part V)—into a single net chargeable income. The tax is then computed at progressive rates (2% to 17% for 2024/25) on the total, rather than applying the standard 15% flat rate to each income stream separately. The election is beneficial only when the combined allowances and deductions exceed the sum of what would be available under separate assessments.

The Statutory Test: Section 41(1) and the “Net Chargeable Income” Calculation

The operative provision is Section 41(1) of the IRO, which states that an individual who has attained the age of 18 may elect to be assessed under Personal Assessment. The election must be made in writing on the prescribed form—IR1241 for the current year or IR1241A for back-year elections. The IRD’s Departmental Interpretation and Practice Notes (DIPN) No. 9 (Revised 2018) clarifies that the election is irrevocable for the year of assessment once made. The practical consequence: if a taxpayer elects Personal Assessment in a year where separate assessments would have yielded a lower total tax, the election cannot be undone.

The key metric is the “net chargeable income” under Section 41(3). This is calculated as total assessable income from all sources minus:

  • Deductions under Sections 12 (outgoings and expenses), 16 (profits tax deductions), and 18 (property tax deductions)
  • Allowances under Section 28 (basic allowance, married person’s allowance, child allowance, dependent parent allowance, single parent allowance, etc.)
  • Concessionary deductions under Section 26C (self-education expenses, home loan interest, voluntary contributions to recognised retirement schemes)

For the 2024/25 tax year, the basic allowance is HKD 132,000 per individual. The married person’s allowance is HKD 264,000. Child allowance is HKD 130,000 per child for the first to ninth child. Dependent parent allowance is HKD 25,000 per parent (HKD 50,000 if residing with the taxpayer). These figures are published in the IRD’s Annual Allowances and Deductions table (IRD website, 2024 edition).

The Three Scenarios Where Personal Assessment Works

Scenario A: The Self-Employed Professional with a Rental Property. A lawyer earning HKD 1.2 million in salaries tax (net of MPF) and HKD 200,000 in property tax from a flat in Mid-Levels would pay salaries tax at 15% (HKD 180,000) and property tax at 15% (HKD 30,000) separately, totalling HKD 210,000. Under Personal Assessment, the combined net chargeable income of HKD 1.4 million minus the basic allowance of HKD 132,000 yields HKD 1,268,000. The progressive tax on this amount is approximately HKD 195,000—a saving of HKD 15,000. The saving arises because the property tax income is now taxed at progressive rates rather than the flat 15%, and the basic allowance is applied to the combined income rather than being split.

Scenario B: The Sole Proprietor with a Loss-Making Business. A sole proprietor operating a consultancy with a net assessable profit of HKD 0 (after Section 16 deductions) but with HKD 500,000 in salaries income would pay salaries tax on the full HKD 500,000. Under Personal Assessment, the nil profit from the business does not increase the tax but allows the business’s capital allowances (Section 37A) to be offset against the salaries income. This is a common strategy for start-up founders who incur significant equipment or premises costs in the first two years.

Scenario C: The Landlord with High Mortgage Interest. A landlord with HKD 300,000 in rental income and HKD 150,000 in mortgage interest (deductible under Section 18(1)(b)) would pay property tax on the net assessable value of HKD 150,000 at 15% (HKD 22,500). Under Personal Assessment, the mortgage interest is deductible from total income, and the progressive rates apply. If the landlord also has HKD 400,000 in salaries income, the combined net chargeable income of HKD 550,000 minus the basic allowance yields HKD 418,000, with a progressive tax of approximately HKD 55,000—lower than the separate total of salaries tax (HKD 60,000) plus property tax (HKD 22,500) = HKD 82,500.

The Two Scenarios Where Personal Assessment Does NOT Work

Scenario D: The High-Income Employee with No Other Income. An employee earning HKD 2 million in salaries with no business or rental income would pay salaries tax at the standard 15% rate (HKD 300,000). Personal Assessment would apply the same progressive rates to the same income, yielding a higher tax because the progressive rates exceed 15% at the highest bracket. The IRD’s own Guide to Personal Assessment (2024 edition, para. 12) notes that Personal Assessment is “generally not beneficial for a person who only has salaries income.”

Scenario E: The Married Couple Filing Separately. Under Section 41(2), a married couple not living apart may elect Personal Assessment jointly. However, if one spouse has significantly higher income than the other, separate assessments may yield a lower total tax because each spouse gets a full basic allowance. The IRD’s DIPN No. 9 (para. 18) advises that couples should compute both scenarios before electing.

Downloading the Correct Form: IR1241, IR1241A, and the eTAX Portal

The IRD provides two prescribed forms for Personal Assessment elections. Using the wrong form or filing outside the statutory window will result in the election being rejected.

Form IR1241: Current Year Election

Form IR1241 is titled “Election for Personal Assessment for the Year of Assessment 2024/25” and must be filed on or before the filing deadline for the relevant BIR60 return. For the 2024/25 tax year, the general filing deadline is 2 May 2025 (one month from the issue date of 1 April 2025). Taxpayers who file through the eTAX portal receive an automatic one-month extension to 2 June 2025. The form is available for download at the IRD’s official forms page: https://www.ird.gov.hk/eng/forms/individual.htm under the section “Personal Assessment.”

The form requires the taxpayer to:

  • Provide the BIR60 reference number (printed on the return)
  • State the basis of election (individual or joint for married couples)
  • Declare that the taxpayer is aged 18 or over
  • Sign and date the form

The IRD’s Completion Guide for IR1241 (2024 edition) specifies that the form must be attached to the BIR60 return or submitted separately through eTAX. If submitted separately, the taxpayer must ensure the election is received by the IRD before the filing deadline. The IRD’s eTAX system automatically records the submission timestamp, which is treated as the date of receipt under Section 64(2).

Form IR1241A: Back-Year Election

Form IR1241A is used for elections relating to prior years of assessment where the taxpayer did not elect Personal Assessment in the original return. The election must be made within six years after the end of the relevant year of assessment (Section 41(5)). For the 2018/19 tax year, the deadline is 31 March 2025. For the 2019/20 tax year, the deadline is 31 March 2026.

The form is available at the same IRD forms page. It requires the taxpayer to specify the year(s) of assessment and to provide a computation showing why the election is beneficial. The IRD’s Guide to Back-Year Personal Assessment Elections (2023 edition) notes that the Commissioner may request additional information under Section 51(4) before processing the election.

The eTAX Portal: Step-by-Step Filing

The eTAX portal (https://www.etax.gov.hk) allows taxpayers to file the BIR60 return and the Personal Assessment election electronically. The portal is open for filing from 1 April 2025 to 2 June 2025 for standard filers. Taxpayers with a recognised digital certificate (e-Cert) or an iAM Smart+ account can log in directly.

The process:

  1. Log in to eTAX and select “Individual Tax Return (BIR60)”
  2. Complete the return sections for salaries, profits, and property
  3. At the “Personal Assessment” section, select “Yes” to elect
  4. The system automatically populates the election form (IR1241)
  5. Review and submit

The IRD’s eTAX User Guide (2024 edition) states that the system will validate the election against the taxpayer’s profile. If the taxpayer is married and filing jointly, the spouse must also have an eTAX account and must authorise the joint election through the portal.

The Filing Calendar: Key Deadlines and Penalties for 2025

The 2025 filing calendar is governed by the IRD’s annual practice and the statutory deadlines under the IRO. Missing a deadline can result in a penalty of up to HKD 10,000 and an additional 5% surcharge on the tax assessed (Section 80(2)).

The General Filing Deadline: 2 May 2025

The IRD issues BIR60 returns on 1 April 2025 for the tax year 2024/25. The general deadline for filing is one month later, on 2 May 2025 (since 1 May is a public holiday). Taxpayers who file by post must ensure the envelope is postmarked on or before 2 May 2025. The IRD’s Annual Filing Calendar (2025 edition) states that late returns are subject to penalty proceedings under Section 80(2).

The eTAX Extension: 2 June 2025

Taxpayers who file through the eTAX portal receive an automatic one-month extension to 2 June 2025. This extension applies only to the filing of the return itself, not to the payment of tax. The IRD’s eTAX Filing Extension Policy (2024 edition) clarifies that the extension is granted automatically and does not require a separate application.

The Objection Window: Section 64(1)

Under Section 64(1) of the IRO, a taxpayer who disagrees with an assessment must lodge a written objection within one month after the date of the notice of assessment. For Personal Assessment elections, the assessment is typically issued in October 2025 for the 2024/25 tax year. The objection must state the grounds in detail and must be accompanied by a computation showing the correct tax liability.

The IRD’s Objection and Appeal Guide (2024 edition) notes that the Commissioner may extend the objection period under Section 64(2) if the taxpayer can show reasonable cause for the delay. However, the extension is not automatic and must be requested in writing before the expiry of the one-month period.

The Payment Deadline: January 2026

The first instalment of tax for the 2024/25 year is due in January 2026 (the exact date is specified in the demand note). The second instalment is due in April 2026. Late payment incurs a 5% surcharge on the unpaid amount, and an additional 5% surcharge if the amount remains unpaid after six months (Section 80(3)).

Practical Considerations for the 2025 Filing Season

The “Married Couple” Trap

For married couples, the Personal Assessment election under Section 41(2) is a joint election. This means both spouses must agree to the election, and the election is irrevocable for the year. The IRD’s DIPN No. 9 (para. 16) warns that a joint election may result in a higher total tax if one spouse has a low income and the other has a high income, because the progressive rates apply to the combined income.

The recommended approach: compute the tax under separate assessments and under joint Personal Assessment before electing. The IRD’s Personal Assessment Calculator (available on the eTAX portal) can perform this comparison automatically.

The “Loss Carry-Forward” Strategy

Under Section 41(4), a loss from a sole proprietorship can be carried forward and set off against future profits from the same business. However, under Personal Assessment, the loss can also be set off against other income (salaries, property) in the same year. This is a one-time benefit: once the loss is set off, it cannot be carried forward.

For a sole proprietor with a loss in the 2024/25 year, the election to Personal Assessment allows the loss to be immediately offset against salaries or property income. This is particularly valuable for professionals who start a side business in the first year of operation.

The “Property Tax” Trap for Landlords

Under Section 5(1), property tax is charged on the net assessable value of a property at the standard 15% rate. Under Personal Assessment, the rental income is aggregated with other income and taxed at progressive rates. For a landlord with a single rental property and no other income, Personal Assessment may result in a lower tax if the net assessable value is below the basic allowance threshold (HKD 132,000 for 2024/25). For a landlord with multiple properties, the progressive rates may exceed 15% at the highest bracket, making Personal Assessment disadvantageous.

The IRD’s Guide to Property Tax (2024 edition, para. 24) recommends that landlords with rental income exceeding HKD 1.5 million per year should compute the tax under both bases before electing.

Actionable Takeaways

  1. Download Form IR1241 from the IRD website before 1 April 2025 and attach it to your BIR60 return if you have mixed income (salaries + business + property) and your total allowances exceed HKD 132,000.
  2. Compute your tax under separate assessments and under Personal Assessment using the IRD’s eTAX calculator before electing; a joint election for a married couple with disparate incomes can increase the tax bill.
  3. File through the eTAX portal before 2 June 2025 to secure the automatic one-month extension and to avoid postal delays.
  4. If you missed the election in a prior year (2018/19 through 2023/24), file Form IR1241A within six years of the end of that year to claim a refund.
  5. For sole proprietors with a business loss in 2024/25, elect Personal Assessment to offset the loss against salaries or property income in the same year, rather than carrying the loss forward.

本文不構成稅務建議。涉及個人稅務情況請諮詢持牌會計師或稅務師。 / This does not constitute tax advice. Consult a licensed CPA or tax advisor for your specific situation.