As Chinese New Year approaches and bonus season rolls around in Hong Kong, many professionals – particularly those in legal and financial services – find themselves receiving their annual windfall.
For some, this takes the form of a 13th-month salary, a long-standing (if unofficial) tradition in many Hong Kong firms. For others, particularly senior staff and partners in law or accountancy firms, the numbers can be significantly larger and more complex.
These may include deferred compensation, Vested Restricted Shares (also known as Restricted Share Units or VRSs/RSUs), or performance-based incentives accrued over several years.
Whether your bonus is a welcome extra month of pay or a substantial lump sum, the question remains: how do you make it count?
Don’t let a windfall drift
For time-poor professionals juggling work, family, and often multiple geographies, it’s easy to let a bonus drift into general expenditure or sit in a low-interest account “until you get round to it.”
But this is often a missed opportunity.
Bonuses represent an ideal moment to review your overall financial picture, to:
- Optimise
- Rebalance
- Plan ahead
With careful planning, you can reduce tax exposure, consolidate accounts, and align your finances more clearly with your goals.
Know what you’re really receiving
For many British expats or internationally mobile professionals, a bonus may not be as straightforward as it first appears.
For example:
- You may have received VRSs/RSUs three years ago, and they’re only now vesting.
- You could be holding shares in your own employer, meaning you’re increasingly exposed to one company’s fortunes.
- You might be due to repatriate in the next 12–18 months, with a different tax regime and residency status on the horizon.
Understanding the details – what is taxable, what is vested, what is at risk, and what options you have – is critical to building a smart strategy.
Avoid overexposure to employer shares
Over the years, I have often encountered many people, particularly those in the large international banking legal or accountancy firms, who are overweight in their employer’s stock.
It’s easy to see why: performance bonuses, restricted shares, and incentive plans all accumulate.
But too much concentration in one company can create unintended risk. Even if the firm is doing well, the principle of diversification still applies.
Selling down some of those holdings and reallocating the proceeds elsewhere could improve both your long-term resilience and peace of mind. Bonus season is often a good time to make that call.
To bring some perspective, when I see clients in this situation, I often ask them:
“If you had the value of those shares in cash right now, would you go and buy xyz company stock with all of it today?”
The response is typically met with a smile and a firm “No.”
Use the bonus to rebalance
A well-planned bonus can help you:
- Top up underfunded pensions or ISAs, especially if you’re returning to the UK soon and want to maximise your tax-advantaged allowances
- Pay down expensive or lingering debts, like credit cards or outstanding tax liabilities
- Create a liquidity buffer, especially important if you’re planning a job change, international move, or early retirement
- Fund near-term goals with clarity, such as school fees, home purchases, or business investment
In each case, the key is intention and control.
Handled intentionally, a bonus can deliver long-term value, rather than being quietly absorbed into everyday spending.
Watch the tax timing
If you’re planning to move jurisdictions – whether from Hong Kong to the UK or vice versa – the timing of a bonus payment can have major implications.
For example, receiving a bonus while a UK resident can trigger higher tax exposure than receiving it while still offshore. The same applies to VSRs sold after relocation.
Understanding the interaction between residency rules, split-year treatment, and temporary non-residence can be the difference between an efficient bonus strategy and an expensive oversight.
Make it a catalyst for review
Ultimately, bonus season is a natural moment to zoom out and look at your broader financial picture:
- Are your investments diversified?
- Do you know your current and future tax exposure?
- Are your retirement, relocation, or family plans on track?
Your bonus isn’t just a reward for last year. It can be a foundation for the years ahead.
At Charlton House, we help clients step back from the spreadsheet and align their finances with their values.
If you’ve just received your bonus – or are expecting one shortly – now is the perfect time to check whether it’s working as hard as you are.
Get in touch to review your options and make a clear, confident plan for the year ahead.
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