<<Ireland used to be attractive, until companies discovered it was full of Irish people...>>
... and i love japanese food, adored japanese girls, and i love food, and adore girls :0)
<<Hong Kong - housing too expensive>>
just in and out of in-tray and send-tray
player 1: Fewer Brits may end up coming to Hong Kong.
(see yesterday's SCMP pasted below). Looks like the UK is going the way of the US in terms of global taxation. A couple of more countries after that, and it will be a domino effect for all nations.
At that point, HK looks less attractive without surrendering citizenship.
Look for a FIRPTA tax (at least on high end real estate) in the UK next.
A 30% "capital gains tax" on any real estate transaction over say US$2 million.
That'll kill the high end UK market going forward. But it still traps all foreigners owning real estate in the UK that decide to sell. They are the perfect targets: very rich, with assets that cannot be moved, and that are not allowed to vote.
South China Morning Post clipping: For many British expats, the solids have just hit the air conditioning. A recent tax case has made it clear that if you are a British national living in Hong Kong but have maintained connections with Britain, you are at risk from the British taxman, who will be happy to charge you 50 per cent tax on your world income. So Kung Hei Fat Choi from me but not from him.
The Court of Appeal has just rejected a British national's claim that he did not owe British taxes because he lived in the Seychelles and handed him a £30 million (HK$359 million) tax bill for the years 1993 to 2004.
This decision could affect thousands of British expats who have lived in Hong Kong for many years but who spend time in Britain. All may be at risk from an increasingly aggressive Revenue service (HMRC) whipped into a frenzy by a government desperate for more tax to cut an increasing national deficit.
Ignore this at your peril.
This case in question involved British businessman Robert Gaines-Cooper, who had argued he did not owe taxes in Britain because he has been a resident of the Seychelles since 1976. He pointed to the rule in HMRC's own leaflet IR20 that defines a non-resident as one who spends less than 91 days per year in Britain. The court said a taxpayer must show a "distinct break" from social and family ties to Britain and that spending all but 91 days outside the country is not sufficient to establish non-resident status.
This is not a change in stance, just a reinforcement of the existing rules. Those rules have been widely misinterpreted. There never has been a rule which says that the number of days spent in Britain is the absolute test of residency.
Most countries operate similar systems. If you spend a certain number of days there, you must necessarily be resident - even if already tax resident elsewhere as well. If you don't spend the requisite number of days, you may still be resident because that country is the centre of your economic or social life, or place of closest connection. It's this latter point which has often been missed. The court confirmed that HMRC were bound by the terms of IR20 but there was an implied condition that to be treated as non-resident, there must be a distinct break with Britain and a severing of all social and family ties.
Gaines-Cooper had a house in Henley where his wife and son lived and where he kept a valuable collection of art and guns. His son was at school in Britain. He had an British mobile phone, his will was drawn up under English law and he regularly attended Ascot racecourse.
Therefore he could be treated as a British resident even after his ostensible departure in 1976. Apart from the Ascot bit, many British nationals living in Hong Kong are in the same boat, which may now reveal itself to be sailing in a cesspit and holed below the waterline.
The court deemed that the correct interpretation of tax residency status turned on whether England had remained the taxpayer's "centre of gravity of his life and interests" and that the 91-day rule could not establish non-residency status on its own, rather it was "important only to establish whether non-resident status, once acquired, has been lost".
In other words, if you spend more than 91 days in Britain, you are definitely resident. If you spend less than 91 days, you may not be resident but must look at other factors, too. The court agreed.
Gaines-Cooper plans to appeal the case to the Supreme Court. His counsel told the BBC that HMRC was "playing games" and mischievously reinterpreting its own guidance, turning it "from a sensible, practical, guide into something meaningless and, which is worse, a devious trap".
HMRC may now look to crack down on more expats. It has launched a sustained attack on people who have used residence and domicile rules to reduce their tax bills. Last year a HMRC team was established to investigate some of Britain's richest individuals, including expats. It follows the enactment of the £30,000 non-domicile levy, introduction of the 50 per cent top income tax rate and the super-tax on the City of London bonus pool. HMRC has said it is "looking at residency and domicile more carefully" and is "committed to ensuring all those resident in Britain pay the tax due and this judgment will aid that effort".
The IR20 guidance on residency was replaced last year with a new booklet called HMRC6. This emphasises the importance of pattern of lifestyle in determining UK residency and states that just because you leave the UK to live or work abroad, you are not necessarily non-UK-resident for tax purposes.
So what to do? You can change your lifestyle to remove the tax danger but for many, that will neither be desirable or feasible. Selling the British home and taking your children out of school in Britain may be a very unattractive option. The alternative is to plan so that if you are caught out, your exposure to British tax will be limited. Without proper planning, you may have to pay British tax at up to 50 per cent on each and every source of worldwide income.
So review your arrangements. They have probably been made on the assumption that you are not a British tax resident. That assumption may be incorrect. Or at least HMRC may not agree.
player tj: wrong premise to believe that global taxation will yield less enthusiastic expatriates
because the folks who are on own account always have ways to deal with tyrannical governments
global banks in hk may not be willing to forego usa capital market for none, but in so far as london capital market is concerned, london can go get stuffed
bank of china system do not allow n.american folks to open accounts for investment purposes, but is perfectly happy to open the usual savings and checking accounts
so, for anyone whose interest is restricted to cash and physical gold, boc is perfectly adequate as gateway to freedom and pathway to redemption
i believe it would be a terrible mistake to believe that the worst of tyranny is already done, when the true evil has just made appearance
escape, escape now, for the children's sake, do not hesitate, before it becomes genuinely too late
player 2: Most Brits here on expat packages, which have huge housing allowances that basically account for much of the premium rental costs in Mid-levels, south side.
Taxing that will kill the real estate market here.
player tj: i believe (i) it is a fundamentally wrong premise that british government will win out against the more able of their entrepreneurial patriots that go ex-patriot, who are effectively on own account, an example being my neighbor
and (ii) we must be cognizant that hk island supply is only so few apartments, and the world has an ever large crowd of wanting financial refugees
besides, at a moment of dire tax-refuge imperative as well as monetary reset need, be it dire in china or/and anywhere else, shorting freedom real estate seem counter-intuitive, especially so within a domain that has proved its refugee-friendly credentials for so very long, particularly so when the existing owners are hardly at all leveraged ...
what, oh, the world is printing money, money is paying zero, escapees want to rent, we are not leveraged, and we have no clue what to do with our cash as it is, so let us go and sell down our real estate to further add to our problems!
counter-intuitive, but i hope you are proven correct, because with second baby on way, i need more space :0)
player 1: suspect that those Brits willing to forgo the British passport are more likely to seek a Singaporean one (and more likely to get such) than a Chinese passport. Singapore might become the preferred domicile over HK, and prices are more affordable there at the moment
as well...
If the UK goes through with global taxation, I suspect Canada and Australia are only a few short years behind....with much of Europe following the UK's lead sooner. Perhaps Greece will give the UK a run for its money as to who institutes global taxation first.
player 1: Not a bubble yet?
Hong Kong: The World's Most Expensive Real Estate?
By Christopher Shay / Hong Kong Thursday, Sep. 24, 2009
Home prices in overcrowded Hong Kong have traditionally been high, but when it comes to having the most expensive residential properties in the world, the Chinese metropolis has never seriously challenged cities like New York, London and Tokyo.
Until now. In another demonstration of how the recession is shaking up the global financial order, two luxury Hong Kong apartments have just gone on the market for a stunning $38.7 million each. If the developer, Sun Hung Kai, finds buyers at that price, the three-level penthouse dwellings, perched atop the 93-storey Cullinan towers with sweeping views of Hong Kong's harbor, could well qualify as the world's most expensive apartments. More than 4,000 sq. ft. in size, the apartments, which are still under construction, are selling for $9,677 per sq. ft. That's considerably above the $6,000-per-sq.-ft. price that top-end London flats were fetching in early 2007, when that city was reputed to be the world's priciest housing market. (See 10 things to do in Hong Kong.)
High-end residential real estate around the world has been hit hard by the recession. Prices for luxury flats in London are still a fifth lower than they were in March 2008. But confidence in Hong Kong's luxury market, driven by surprisingly strong economic growth in China, is recovering quickly. Just last week a penthouse apartment located in a new tower built not far from the Cullinan in Hong Kong's Kowloon district sold for $3.16 million. That may not sound like much for an upscale address, but the apartment has just 590 sq. ft. of useable space — meaning the buyer paid $5,356 per sq. ft. of living area.
Soaring prices for posh abodes does not mean Hong Kong's economy has escaped the recession. The unemployment rate remains high — for Hong Kong at least — at 5.4%; retail sales dropped 5.5% year-on-year in July, the most recent data available. Though average prices for non-luxury housing has rebounded 25% this year, they are still a third lower than the market's all-time high, in 1997. (See pictures of Hong Kong.)
The luxury residential market, however, is getting a special boost. Local property agents say prices are being driven higher by buyers from the Chinese mainland. Wealthy Chinese have ample cash and easy access to low-interest loans because of the government's loose monetary and fiscal policies, which were implemented last year to fight the recession. Buyers are looking to invest close to home, and despite China's restrictions on moving capital beyond its borders, that often means acquiring assets in Hong Kong. (The former British colony belongs to China but has a separate system of government and a more open economy.) About half of the buyers for luxury apartments in Hong Kong in recent weeks came from the mainland, according to reports. (Read "Asia's Easy Money: Fueling New Bubbles?")
The large number of Chinese buyers means growth in Hong Kong's luxury-property market could suddenly cool if Beijing decides to tighten credit. Su Ning, vice governor of the mainland's central bank, said last week that China would continue its "appropriately loose" monetary policy at least into next year, but regulators have already started to clamp down somewhat. In August, total lending by Chinese banks dropped to a third of June's levels.
Peter Churchouse, a director at a Hong Kong investment research and advisory firm, says he doesn't think Hong Kong's housing market is a bubble. But some analysts worry that low interest rates, high liquidity and a tight supply of new apartments could fuel irrational exuberance. Churchouse says: "I could easily see this market developing into a bubble, but it's not a bubble yet." That should be of some comfort for the buyer who just paid $3.16 million for a 590 sq. ft. apartment.
player tj: if the media says it, i am more confident than ever that the precise opposite shall turn out to be true
hk real estate really is cheaper now than at 1998 asian financial crisis low, relative to real gold
and
as the world descends to where we truly had never been, and where we really do not wish to be,
hk re is a bargain, at the cusp of a genuine boom rather than kaboom
player 1: Jay, How can you say HK real estate really cheaper than 1998? Where did you get that erroneous figure? HK prices are unbelievably high today, relative to any yardstick you choose.
Overvalued Housing Market
1 Feb 2010
Price-to-Rental Ratio Backs to 1997-Peak Level
Are property prices too high? The price-to-rental ratio provides one of the yardsticks to gauge whether housing is priced at fair value.
For instance, the price-to-rental ratio for a 1,500 square feet flat (the so-called luxury home) located on Hong Kong Island was 40.2 in September 2009, meaning that it would take over 40 years for the property investment to break even disregarding interest and other expenses. The ratio was 42% higher than a reading of 28.3 during the 1997-peak and 122% above its 1982-2009 historical average of 18.1.
The situation is not any better in the mass market. Take the price-to-rental ratio of a 600 square feet flat located on Hong Kong Island as an example, the latest reading is not only back to the 1997-peak, but is also 53% higher than its historical average.
Housing Price-to-Income Ratio is Not Too Far Below 1997 Bubble Market
Another useful check on property market valuation is the housing price-to-income ratio. Again, the luxury segment looks bubbly. For instance, the price-to-income ratio of a 1,500 square feet flat located on Hong Kong Island was 115.3 in September 2009, meaning that the price of such a flat is equivalent to over 115 years of an average household's income. The ratio was 24% higher than that prevailing during the 1997-peak and was also 120% above its historical average.
Conditions in the mass market might look less bubble-like, but prices in the sector are not inexpensive by historical standard. For instance, the price-to-income ratio of a 600 square feet flat located on Hong Kong Island was 19.8 in September 2009, not too far from a reading of 22.3 during the 1997-peak and was 54% above its historical average ratio of 12.9.
hktdc.com
player tj: easy to say hk real estate is cheaper now than at asian financial crisis depth
because i bought my place in november 1998 - feb 1999, finally closed june 1999, for hkd x
when gold, the one true and elemental money, was usd 270/oz at that sorry time
xxxx oz gold = apartment in 1999 june
in the interim, gold (1120) has gone up 4.14 x
today, if one wants to sell the abode, should get hkd y, and if wishes to buy same sanctuary, may necessitate hkd y+z
i.e. apartment only went up 3.05-3.50x
meaning
yyyy oz gold = apartment today
and ... we know gold is dirt cheap at 1120, thus, logic follows, that the apartment must be less than dirt cheap
especially given that cash is garbage, takes usd 1 billion deposited in hsbc to be able to earn enough interest income per tragic day to buy one dismal big mac happy burger meal every 24 hours
whereas is takes hkd zzzzz to rent same abode should one wish to embrace ocean frontage while brushing teeth
under the circumstances, we must seriously challenge the idea that hk real estate is 'expensive' and truly appreciate that
(i) cash is crap, (ii) gold is true and truly cheap, and (iii) hk real estate is under-valued against gold
player 3: Jay, I am being interviewed for EFE TV from Spain. So I am looking very serious when I reply to you. But actually I have not much to say other than I think I will agree that I want to retire in Asia as the care will be much better.
Imagine being in the US, in a home, I don't care how nice, when you 85,,, Ugh...
player tj: we understand each other perfectly
[Player 1] is talking out of his hat and knows not what he is speaking about, because he hasn't thought it through
just what will caroline do in bozotown usa when she is 87 or even 68?
starting at 70, i want to be massaged everyday for the rest of my 100 years life, by successive selected chinese-trained specialists, fed by thai-enabled cook, and eventually, at age 98 perhaps, pampered / diapered by philippines-educated nurses
on ... oh, say koh samui or some place like that
|
