Receive monthly income for retirement and enjoy a tax deduction1

Count down to tax deduction claims for 2019/20

Receive monthly income for retirement and enjoy a tax deduction1

Count down to tax deduction claims for 2019/20

Receive monthly income for retirement and enjoy a tax deduction1

Count down to tax deduction claims for 2019/20

Enjoy tax benefits with a Qualifying Deferred Annuity Plan

Tax season is coming, so while you are planning for it, why not plan for your retirement and enjoy a tax deduction at the same time.

Qualifying deferred annuity plans can provide you with a steady stream of income after you retire, and enable you to claim tax saving up to HK$10,2002 per person or HKD20,4002 for a married couple each year while you are paying your premiums. So get started now and reward yourself with a nice meal or overseas trip with your family and friends with the tax you may save!

 

HSBC Income Goal Deferred Annuity Plan

Starting on 24 February 2020, the HSBC Income Goal Deferred Annuity Plan will be enhanced! You can pay in for 5 or 10 years and enjoy potential tax savings, and then receive a monthly stream of income for 10, 15 or 20 years. Anyone aged 25 or above can apply. If you apply before the end of March this year, you will be in time to enjoy potential tax savings for 2019/20!


Annuity payment
Enjoy a monthly stream of income after you retire.

Tax savings
Save up to HK$10,2002 per person or HKD20,4002 for a married couple for at least 5 years

Potential returns
Get up to 3.4%3 potential return

Premium discount
Enjoy a discount of up to 13% on your first year’s premium4

Earn RewardCash
Pay with your HSBC Credit card and earn RewardCash6

This is a Qualifying Deferred Annuity Policy certified by the Insurance Authority of the Hong Kong SAR, underwritten by HSBC Life (International) Limited. T&Cs apply.
Potential returns are not guaranteed. Actual returns may be higher or lower.

 

How does it work?

Example 1:

Joey is 26, single, and works as a book editor in a publishing company. She wants to enjoy tax benefits now while saving for her retirement at the same time. So she decides to take out the deferred annuity plan outlined below. With the potential savings, she can enjoy a 3-star Michelin restaurant dinner with her friends.

Annual Premium Payment: HKD 41,672
Premium Period: 10 years
Accumulation Period: 25 years
Annuity Period: 15 years
Annual Premium Payment: HKD 41,672
Premium Period:
10 years
Accumulation Period: 25 years
Annuity Period:
15 years
  1st year 2th – 10th year Total
Annual premium After discount:
HKD 40,005
HKD 41,672 per year HKD 415,049
Savings on first year premium4 HKD 1667 - HKD 1,667
Potential savings on tax2 HKD 6,801 HKD 7,084 per year HKD 70,558
After 10 years
Total Premium Paid
HKD 415,049
Total Savings
HKD 72,225

After the accumulation period, Joey can choose to receive monthly annuity payment or leave the money to grow and accrue them with interest(if any) in the plan.

 

Projected monthly annuity payment5 starting at age 51
HKD 5,575 for 15 years
Or
Projected total cash value if Joey elects to keep the monthly annuity payment within the policy during the annuity period until age 66
HKD 1,281,041

 

If Joey selects to pay full premiums with her HSBC Credit card throughout the premium payment periods, she can even earn RewardCash up to $41506!

 

Example 2:

Simon, 45, is a senior manager at an international firm. He is married and has a daughter. He decides to take out the deferred annuity plan outlined below to start saving for his retirement. With the potential savings he will enjoy, he could take the family on a holiday.

Annual Premium Payment: HKD 107,545
Premium Period: 5 years
Accumulation Period: 15 years
Annuity Period: 15 years
Annual Premium Payment: HKD 107,545
Premium Period:
5 years
Accumulation Period: 15 years
Annuity Period:
15 years
  1st year 2th – 5th year Total
Annual premium After discount:
HKD 100,017
HKD 107,545 per year HKD 530,195
Savings on first year premium4 HKD 7,528 - HKD 7,528
Potential savings on tax2 HKD 10,200 HKD 10,200 per year HKD 51,000
After 5 years
Total Premium Paid
HKD 530,195
Total Savings
HKD 58,528

After the accumulation period, Simon can choose to receive monthly annuity payment or leave the money to grow and accrue them with interest(if any) in the plan.

 

Projected monthly annuity payment5 starting at age 60
HKD 5,496 for 15 years
Or
Projected total cash value if Simon elects to keep the monthly annuity payment within the policy during the annuity period until age 75
HKD 1,262,980

 

If Simon selects to pay full premiums with his HSBC Credit card throughout the premium payment periods, he can even earn RewardCash up to $53016!

 

The above examples are for illustration only. Annual Premiums listed do not include levy by the Insurance Authority of Hong Kong SAR.

 

Calculate how much you can potentially save on tax

Please input the amounts below for your assessment year.

1. Net taxable income
HKD

The amount of net taxable income before any TVC and QDAP premium tax deduction.

 
2. Tax-deductible Voluntary Contributions
HKD

Each individual could be eligible for a tax deduction of up to HKD60,000 per year with an aggregate amount of premium of QDAP and contribution to TVC account.

 
3. Premium paid to a QDAP
HKD

Each individual could be eligible for a tax deduction of up to HKD60,000 per year with an aggregate amount of premium of QDAP and contribution to TVC account.

A taxpaying couple is allowed to allocate tax deduction for QDAP amongst themselves to claim the total deductions of HKD120,000, provided that the deduction claimed by each person does not exceed HKD60,000.

 

Taxable income, tax deductions for QDAP and TVC

1. Net taxable income
HKD (nil)
2. Contributions to a TVC
HKD (nil)
3. Premium paid to a QDAP
HKD (nil)
Edit

Approximate tax amount# you can potentially save with QDAP premium and / or TVC tax deduction for a year of assessment:

HKD

Reset

Any information listed and figures calculated on this website and smart tax calculator is for reference and general information only. It is not intended to constitute a recommendation or advice to any prospective customers and is not intended as a substitute for professional advice. You are advised to seek independent tax advice if in doubt. In no event will HSBC Life or HSBC be liable for any damages, losses or liabilities including without limitation, direct or indirect, special, incidental, consequential damages, losses or liabilities, in connection with your or any third party’s use of this website, or your reliance on or use or inability to use the information contained on this website.

 

Our retirement plans

At HSBC Life, we provide Insurance plans with life protection for you to plan ahead for retirement according to your needs.

Learn more

How does tax deduction for deferred annuities work?

Qualifying Deferred Annuity Policy (QDAP)

  1. What is a QDAP?

    The full name of a QDAP is qualifying deferred annuity policy. It is a form of annuity insurance that the Government of Hong Kong SAR has proposed a tax deduction for in order to promote voluntary retirement savings.

    To facilitate this objective, the Insurance Authority of Hong Kong SAR has published a guideline on QDAP that sets out the criteria for a deferred annuity product to be certified as a QDAP. Some of the qualifying factors are, but not limited to, concerning the minimum premium payment period, minimum total premiums, minimum annuity period and the annuitant’s minimum age when the annuity period starts.

    The annuitant (as taxpayer) of a QDAP can claim for potential tax deductions on qualifying premiums of up to HKD60,000. Not all private deferred annuity plans in the market are certified as QDAPs. If you would like to apply for a QDAP and be eligible for tax deduction, please read the plan details carefully and refer to the Insurance Authority’s website for further assurance.

  1. Can I claim tax deduction for QDAP covering my spouse?

    A taxpayer can claim tax deduction for qualifying annuity premiums paid under a QDAP covering his/ her spouse as joint annuitant, or either the taxpayer or his /her spouse as a sole annuitant. A taxpaying couple is allowed to freely allocate tax deduction for qualifying annuity premiums amongst themselves to claim the total deductions of HKD120,000, provided that the deduction claimed by each person does not exceed the individual limit (HKD60,000).

Arrangements for a tax deduction

  1. How to claim tax deduction with a QDAP?

    If you have bought a QDAP, you will receive an annual statement . You can then use this document to apply for tax deduction under salaries tax and personal assessment of the relevant year of assessment with Inland Revenue Department from your basic premiums paid of your QDAP. Submit the completed Tax Return – Individuals to Inland Revenue Department (IRD) as usual.

For more information about how QDAPs can help you plan your retirement and enjoy potential tax deductions, please contact your HSBC financial advisor.


End Notes

  1. Tax deduction is allowed for qualifying annuity premiums paid in a year of assessment.
  2. Based on the highest rate (17%) of progressive tax rates and a taxpayer paying HKD60,000 of qualifying deferred annuity premiums during the year of assessment.
  3. The projected benefit consists of both guaranteed and non-guaranteed annuity payment. Therefore, the total projected benefit of a policy is not guaranteed and is for illustration purposes only. The actual benefit may be higher or lower than the amount quoted. The example is based on the assumption of a USD denominated policy with policy period of 40 years and it is assumed that (i) the life insured aged 26-50; (ii) premiums are payable over 5 years in annual mode, accumulation period is 25 years and annuity period is 15 years; (iii) the Monthly Annuity Payment is paid out at monthly interval (iv) all premiums have been paid in full during the premium payment period; (v) neither policy loan nor partial surrender has been applied during the policy term and (vi) there is no change in dividend and Special Bonus scale.
  4. This discount offer is valid from 1 January - 31 March 2020 and is only applicable to successful applications of a new purchase of HSBC Income Goal Deferred Annuity Plan and HSBC EarlyIncome Deferred Annuity Plan within the promotional period mentioned above (both dates inclusive) with policy being issued within the period of 1 January 2020 to 31 May 2020 (both dates inclusive), when the requirements of a specified premium payment term and annualized premium are met. Promotional terms and conditions apply.
  5. Projected monthly annuity payment consists of both monthly guaranteed annuity payment and monthly non-guaranteed annuity payment.
  6. Online bill payments under bill type of policy loan repayment to insurance company made with credit card do not earn RewardCash

Disclaimer

Please refer to the product brochures of the respective products for their detailed product features and associated risks, and please refer to the policy provisions for the detailed terms and conditions.

Information on this website relating to Qualifying Deferred Annuity Policies is issued by HSBC Life (International) Limited (“HSBC Life”). HSBC Life is authorised and regulated by the Insurance Authority (“IA”) of the Hong Kong SAR to carry on long-term insurance business in the Hong Kong SAR. The Hongkong and Shanghai Banking Corporation Limited (referred to as "HSBC") is an insurance agent of HSBC Life for the distribution of life insurance products.

Any information listed and figures calculated on this website are for reference only. It is not intended to constitute a recommendation or advice to any prospective customers and is not intended as a substitute for professional advice. You should not act on any information on this website, without seeking specific professional advice. You may find the wealth management plan you need by undertaking an assessment for financial planning. This website provides general information issued from publicly available sources. HSBC Life or HSBC does not provide any form of tax advice. You are advised to seek independent tax advice if in doubt. In no event will HSBC Life or HSBC be liable for any damages, losses or liabilities including without limitation, direct or indirect, special, incidental, consequential damages, losses or liabilities, in connection with your or any third party’s use of this on this website, or your reliance on or use or inability to use the information contained on this webpage.

If you are in doubt about the meaning or the effect of the contents on this website, you should seek independent professional advice. Please note that the tax law, regulations and / or interpretations are subject to change and may affect any related tax benefits including the eligibility criteria for a tax deduction. HSBC Life or HSBC is not responsible for informing you about any changes in laws, regulations or interpretations, and how they may affect you. Further information regarding tax concessions applicable to Qualifying Deferred Annuity Policies may be found at the webpage of the Insurance Authority: www.ia.org.hk.

The above qualifying deferred annuity policies are life insurance plans with a savings element (“Plans”) underwritten by HSBC Life. You are subject to the credit risk of HSBC Life. The Plans provide guaranteed cash value, non-guaranteed dividend and special bonus (only applicable to HSBC Income Goal Deferred Annuity Plan). The dividend and special bonus (if any) will be declared by HSBC Life at its absolute discretion. If surrendered early, the amount to be received may be considerably less than the total premiums paid. The Plans offer features certified by the IA to be compliant with its Guideline on Qualifying Deferred Annuity Policy. Nonetheless, certification by IA does not imply official recommendation does not guarantee you will be eligible for a tax deduction on the premium paid for the Plans. Actual tax deduction under salaries tax and personal assessment with Inland Revenue Department from premiums paid under the Plans is subject to your individual circumstances. It is also at Inland Revenue Department’s discretion when your premiums are paid over the premium payment period. Please refer to the “Key Risks - Tax implication of Qualifying Deferred Annuity Insurance Policy” section of the product brochures for details regarding key risk factors.

HSBC Life is incorporated in Bermuda with limited liability, and is one of the HSBC Group’s insurance underwriting subsidiaries. The Plans are intended only for sale through HSBC in the Hong Kong SAR. For monetary disputes arising between HSBC and you out of the selling process or processing of the related transaction, HSBC will enter into a Financial Dispute Resolution Scheme process with you; however any dispute over the contractual terms of the product should be resolved between HSBC Life and you directly.