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Successfully apply for eIncomePro Deferred Annuity Plan (100% Guaranteed) with promo code "3IPM03" enjoy up to 3.02% - 3.3% of guaranteed internal return rate and 3x +FUN Dollars/yuu points.
Protect yourself and your family and plan for a better future with potential tax savings. Qualifying Deferred Annuity Policy (“QDAP”), Voluntary Health Insurance Scheme (“VHIS”) Certified Plan and MPF Tax Deductible Voluntary Contributions (“TVC”) solutions offer you sufficient protections and up to HKD68,000 tax deduction per tax assessment year (The maximum tax deduction for qualifying premiums paid under VHIS certified plan for each insured person is HKD8,000 per each tax assessment year, and the combined tax deductions for QDAP and TVC for each taxpayer is capped at HKD60,000 per each tax assessment year).
Background
Mr. Lee, aged 45, is married with a 1-month old daughter. As a new dad, he reviewed his family’s protection needs to ensure his wife and him could worry-freely accompany their daughter to grow up. With limited capital and conservative wealth management, what protection solutions should he select?
Protection needs
Mr. Lee chose Accumulation Period of 10 years and annual payment mode. With 5 years premium payment, he could enjoy 100% guaranteed monthly annuity income[12] in annuity period[11] of 10 years.
Mr. Lee and his spouse are both Hong Kong taxpayers having income chargeable to tax and they do not hold other tax deductible MPF voluntary contributions account nor other QDAP policies. They can allocate the qualifying annuity premiums for tax deductions in order to potentially claim a maximum amount of deductions of HKD120,000, so as long as the deductions claimed by each taxpayer do not exceed the individual limit (assuming the combined maximum total tax deductions for qualifying annuity premiums and MPF tax deductible voluntary contributions for the applicable tax assessment year is HKD60,000 per individual). Online application for eIncomePro Deferred Annuity Plan (100% Guaranteed) online could be completed around 10 minutes[13], suitable for busy person like Mr. Lee who could finish his application in a moment after daily work.
Annual Deferred Annuity Plan Premium: HKD120,000
Potential tax savings in a tax assessment year[14]: HKD20,400
Total Monthly Guaranteed Annuity Income is 147.4% of Total Premiums Paid
Background
Miss Chan, aged 36, is a white collar executive with a considerable salary. She is a Hong Kong taxpayer and the highest rate (17%) of the progressive tax rates is applicable to her. She wishes to plan ahead for her retirement, at the same time enjoy tax deduction benefits.
Protection needs
Miss Chan can choose a Accumulation Period of 15 years and annual payment mode with HKD38,000 premium level. With 5 years premium payment, she can enjoy 100% guaranteed monthly annuity income [12] in an annuity period [11] of 10 years, considered to be a low risk investment protection. Online application for eIncomePro Deferred Annuity Plan (100% Guaranteed) can be completed in around 10 minutes [13], suitable for a busy person like Miss Chan who can finish her application in an instant after work.
Miss Chan, who wants to enjoy the tax deduction incentive, has also decided to make a TVC of HKD22,000 per year in addition to applying for eIncomePro Deferred Annuity Plan.
Miss Chan can apply for a TVC account and make TVC as she is a current employee member of an MPF Registered Scheme. With the Constituent Funds of a range of different risk levels, the TVC made by Miss Chan will be invested in the Constituent Funds she chooses according to her investment objective and risk tolerance level. She can change her TVC methods according to her personal financial situation, i.e. making monthly TVC by direct debit, or simply paying a lump-sum. She can even stop the contributions when needed. Miss Chan thinks TVC is flexible, which suits her needs.
Annual Deferred Annuity Plan Premium: HKD38,000
Annual Contribution to TVC account: HKD22,000
Annual Deferred Annuity Policy Premium and Contribution to TVC account in total: HKD60,000
Potential tax savings in a tax assessment year: HKD10,200 [15]
Background
Mr. Cheung, aged 45, plans to retire at age 65 and hoping to receive monthly “bonus” to enrich his retirement life.
Protection needs
The plan provides incremental annuity income, helping Mr. Cheung to counteracts inflation. The plan also provides Annual Guaranteed Bonus and Special Guaranteed Bonus; Mr. Cheung may choose to receive Annuity Income in cash or to retain it in the Policy for accumulating interest, and reaping potential upside returns over a period of time.
During the Annuity Period, the plan expects to pay a non-guaranteed Annual Dividend to your policy at each policy anniversary, Mr. Cheung may accumulate these dividends in the policy account to earn interest for future use or withdraw them according to his needs. In the event of policy termination, a lump-sum non-guaranteed Terminal Dividend (if any) may become payable to Mr. Cheung or the Beneficiary(ies), providing extra potential returns.
As Mr. Cheung is a Hong Kong taxpayer having income chargeable to tax, he could potentially enjoy tax deduction of up to HKD60,000 for the premium paid for QDAP. Potential tax savings can be up to HKD10,200 per taxpayer in a tax assessment year (assuming the combined maximum total tax deductions for qualifying annuity premiums and MPF tax deductible voluntary contributions for the applicable tax assessment year is HKD60,000 and the applicable tax rate is 17%).
Annual Qualifying Deferred Annuity Plan Premium: HKD60,000
Potential tax savings in a tax assessment year[16]: HKD10,200
Background
Mr. Chan, aged 25, is a career starter working diligently. Although work is exhausting, Mr. Chan believes that by managing his wealth proficiently and selecting the right protection solutions, he can focus on his career without worries.
Protection needs
Mr. Chan can apply for a TVC account as he is a current employee member of an MPF Registered Scheme and can make TVC at his own pace. He can direct debit from as little as HKD300 per month, or by lump-sum TVC of HKD1,000 or more; contributing by lump-sum provides him with the flexibility to contribute into his TVC account whenever he wants to fit his daily financial and saving needs. Mr. Chan may face higher financial burden during his studies, he can choose to suspend making lump-sum contributions to satisfy his financial needs in tuition and housing fees. As Mr. Chan is a Hong Kong taxpayer having income chargeable to tax, by making contribution to TVC account, Mr. Chan can potentially enjoy up to HKD60,000 income tax deduction annually under Hong Kong personal income tax, with maximum potential tax savings of HKD10,200[17]!
Annual Contribution to TVC account: HKD60,000
Potential tax savings in a tax assessment year[17]: HKD10,200
Products eligible for tax deduction include Qualifying Deferred Annuity Policy (QDAP), Voluntary Health Insurance Scheme (VHIS) and MPF tax-deductible Voluntary Contributions (TVC). The first 2 products help you save for retirement while the last product is for health protection. The 3 products are eligible for tax deduction of up to HKD68,000 in total. (The maximum tax deduction for qualifying premiums paid under VHIS certified plan for each insured person is HKD8,000 per each tax assessment year, and the combined tax deductions for QDAP and TVC for each taxpayer is capped at HKD60,000 per each tax assessment year). The tax deduction is only applicable to Hong Kong taxpayer.
Whether you are a career starter, white collar worker, pre-retiree or a married couple, check out the examples in this website to know more about how to enhance protection, while at the same time enjoying tax deduction.
No, Qualifying Deferred Annuity Policy (QDAP) is the only annuity product eligible for a tax deduction. Hang Seng provides a variety of QDAPs, such as eIncomePro Deferred Annuity Plan (100% Guaranteed), where you can apply online to enjoy stable guaranteed annuity income and life protection with tax deduction benefits.
Early surrender or termination of an annuity policy usually incurs a financial penalty, so policyholders will most likely suffer from financial loss in case of early surrender, especially during the early years of the policy period. Please check with your insurer about any applicable fees or charges before replacing your existing policy. In case of doubt, please seek professional advice[18].
Taxpayers must meet all the eligibility requirements for QDAP tax deductions set out in the Inland Revenue Ordinance and any guidance issued by the Inland Revenue Department (IRD) to claim this tax deduction. If the taxpayer’s spouse has no income chargeable to tax, the couple is not eligible to elect joint assessment or elect personal assessment jointly. Therefore, the maximum amount of deduction allowable for the taxpayer is the individual limit of HKD60,000. Please visit the IRD website for more information. If you have further questions on tax deductions, please approach the IRD directly[18].
A deferred annuity product must satisfy the criteria set out in the guideline issued by the Insurance Authority to be a QDAP[18]. The criteria include:
Hong Kong taxpayer who has purchased an eligible health insurance plan (certified by the Health Bureau of Hong Kong as VHIS) can claim a tax deduction on qualifying premiums up to HKD8,000[19] per insured person each tax assessment year. The relationship between the taxpayer and the insured person must be included in the definition of “specified relatives” as set out in the Inland Revenue Ordinance (Cap. 112). The deduction is available for certified plans, but not any other optional benefits, with policy effective date of 1 April 2019 or later. To facilitate the tax deduction process under your Hong Kong personal income tax return filing, you’ll receive Premium payment record from HSBC Life (International) Limited by the end of April each year.
TVC is a new type contribution to be offered in a Registered Scheme upon each MPF service provider’s decision, which can only be paid into a specific TVC account of a Registered Scheme, such as the Hang Seng Master Trust. The purpose of TVC is to provide eligible members a tax concession for voluntary contributions and to assist in member’s long term saving for a better retirement.
A TVC account allows any members to make tax deductible voluntary contributions starting from 1 April 2019.
Such contributions are voluntary in nature, and are subject to the same vesting, preservation and withdrawal restrictions applicable to mandatory contributions. TVC can only be made directly by the persons who fulfil the eligibility requirement. Therefore, involvement from the employers is not required.
TVC account holders can contribute into their TVC accounts via two methods:
The maximum tax deductible amount under Hong Kong personal income tax for a tax assessment year is HKD60,000 and it is an aggregated limit for both TVC and qualifying annuity premiums.
The individual taxpayer (not the Trustee, Sponsor and/or other operators of the Hang Seng Master Trust) has to make tax deduction claim on the TVC amount in his/her tax return. If you are in doubt of your personal tax position, please consult your own advisor.
To facilitate the tax return filing by TVC account holders, the Trustee will provide a TVC summary to each TVC account holder in the Hang Seng Master Trust around 10 May after the end of the relevant year of assessment (i.e. before the end of a period of 40 days from the beginning of the next tax assessment year commencing on 1 April).
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