I'm LongbridgeAI, I can summarize articles.The Hong Kong government clarified that proprietary trading businesses are ineligible for carried interest tax concessions, as they do not meet the definition of a 'fund'. There are no plans to expand the scope of these tax measures. The Inland Revenue (Amendment) Bill 2026 is currently under Legislative Council scrutiny, with the second reading debate expected in the second half of 2026. If approved, the measures may take effect from the 2025/26 year of assessment.
The Financial Services and the Treasury Bureau responded to media enquiries regarding the carried interest tax concession regime, saying there are no plans to further expand the scope of the concession measures and that administrative guidance will be issued to clarify details when necessary.
The government said one of the key initiatives under the Inland Revenue (Amendment) (Tax Concessions for Funds, Family-owned Investment Holding Vehicles and Carried Interest) Bill 2026 is to expand the scope of the carried interest tax concession regime. Businesses that use proprietary capital to trade or hold assets for their own account to generate income, generally referred to as proprietary trading businesses, do not meet the relevant definition of a "fund". As such, performance-based remuneration distributed by such businesses would not qualify for the proposed tax exemption under the Bill.
The Bill is currently being scrutinized by the Bills Committee of the Legislative Council, which has completed clause-by-clause examination. The government aims to resume the second reading debate of the Bill in 2H26. Subject to Legislative Council approval, the measures may take effect from the 2025/26 year of assessment.
Foreign media yesterday cited sources as saying that the Hong Kong government was considering amendments to legislation related to tax relief for the asset management industry, allowing performance-based remuneration for employees of proprietary trading firms to be tax exempt. The tax concession currently only applies to institutions such as funds, asset managers and family offices.(ha/da)