Insurance Authority publishes list of deferred annuity products qualified for tax deduction
1 April 2019
The Insurance Authority (IA) today (1 April 2019) published on its website a list of Qualifying Deferred Annuity Policies (QDAPs) eligible for tax deduction 1 .
The Government announced in the 2018-19 Budget tax incentive of up to $60,000 per year 2 for deferred annuity policies. To allow flexibility for couples to benefit from the entitlement, they could enjoy a combined limit of $120,000 per year.
“The tax incentive injects a huge impetus that will help promote healthy development of the deferred annuity market and enrich the mix of insurance products available in Hong Kong,” said Mr Clement Cheung, Chief Executive Officer of the IA. “The advent of QDAP also enables policy holders to receive a stable stream of income, giving them greater certainty and control in planning for their retirement life.”
The IA has promulgated a new guideline elucidating the standard features of QDAP that include minimum total premium of $180,000, minimum payment period of five years, minimum annuity period of 10 years, annuitization at the age of 50 or above, disclosure requirements on the Internal Rate of Return, guaranteed and variable payments, as well as separation of riders that are not eligible for tax deduction.
All product brochures have to carry the QDAP logo for easy identification, and members of the public can verify the status of a specific product by referring to the IA website or obtain further information by browsing the thematic webpage .
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Notes:
1
The tax deductions are only applicable if relevant requirements stipulated in the Inland Revenue Ordnance (Cap. 112) are complied with.
2
The tax deductible limit is an aggregate of qualifying annuity premiums and MPF tax-deductible voluntary contributions.
QDAP product brochures have to carry the QDAP logo.