Qualified Deferred Annuity QDAP 2027 Calculator HK
QDAP premiums are tax-deductible up to HKD 60,000/year (combined cap with TVC) under Hong Kong salaries tax. This 2027 calculator works out your annual tax saving, projects the guaranteed and non-guaranteed annuity income at age 65, and compares against pure investment in a balanced fund. Built for Hong Kong taxpayers aged 18 to 60.
Max HKD 60K deductible (shared with TVC).
Minimum 5 years per QDAP rules.
Cap is HKD 60K combined QDAP + TVC.
Minimum 50 per QDAP rules.
What Is a QDAP in 2027
A Qualifying Deferred Annuity Policy (QDAP) is a Hong Kong Insurance Authority-certified life-insurance product designed for retirement income. To qualify for the salaries tax deduction, the QDAP must have: (1) minimum total premium of HKD 180,000; (2) minimum premium payment period of 5 years; (3) minimum annuity period of 10 years; (4) commencement of annuity payments at age 50 or later. The premium deduction cap is HKD 60,000/year combined with MPF Tax-Deductible Voluntary Contributions (TVC). Last updated: 2026-05-18. Source: Insurance Authority QDAP register, IRD.
Worked Example — HKD 60,000/Year for 5 Years
A 35-year-old earning HKD 800,000 pays HKD 60,000/year for 5 years (HKD 300,000 total) into a QDAP scheduled to pay from age 65. With no other TVC contributions, the full HKD 60,000 is deductible. At the 17% marginal rate, annual tax saving = HKD 10,200. Across 5 years, total tax saved = HKD 51,000. The effective cost of the HKD 300,000 invested becomes HKD 249,000. At age 65, the QDAP pays approximately HKD 2,500–3,500/month guaranteed plus a non-guaranteed top-up depending on insurer dividend declarations, for the 10–20 year annuity period.
QDAP vs TVC vs Pure Investment
Three retirement options for the same HKD 60,000/year top-up: (1) QDAP — tax deduction + insurance protection + guaranteed annuity. IRR around 2.0–2.5% on the guaranteed leg. Capital is locked. (2) TVC — tax deduction + MPF fund choice. IRR depends on fund choice (3.6% industry average net). Locked until 65. (3) Pure investment in an ETF — no tax deduction, full liquidity, expected IRR 5–7%. QDAP wins for risk-averse savers in the 14–17% bracket who want a known income stream. Active investors prefer ETF; balanced savers split 50/50 QDAP + TVC.
2027 Best Practices for Choosing a QDAP
Five evaluation criteria from the Insurance Authority: (1) Premium term — choose 5 years if cash-rich, 10 years for moderate budgets. (2) Annuity period — 10 years for max monthly payout, 20 years for longevity protection. (3) Currency — HKD-denominated avoids FX risk. USD policies may carry higher IRR but expose you to HKD/USD volatility. (4) Insurer rating — choose insurers rated A or above by S&P, Moody's, AM Best. (5) Surrender values — check the guaranteed cash value tables at year 5, 10, 15 in case of emergency surrender. Early termination typically forfeits 80%+ of premiums in year 1, recovering by year 8–10.
Frequently Asked Questions
What is the QDAP tax deduction cap in 2027?
HKD 60,000 per year, shared with MPF Tax-Deductible Voluntary Contributions (TVC). The combined QDAP + TVC cannot exceed HKD 60,000 of deduction per year.
What is the minimum premium term?
Five years — that is the IA requirement for QDAP qualification. Many insurers offer 5/10/15/20-year options.
When can I start receiving the annuity?
From age 50 onwards. Most policyholders schedule payouts at age 60 or 65 to align with retirement.
Can both spouses claim QDAP deduction?
Yes. Each spouse gets their own HKD 60,000 cap independently. Family-level total deduction can reach HKD 120,000.
Are QDAP payouts taxable income?
No. Annuity income from a QDAP is not taxable in Hong Kong. The HK system taxes the premium relief year, not the payout year.
What happens if I surrender early?
The premium tax deduction claimed in earlier years is clawed back by IRD. You also typically lose 50–80% of premiums depending on surrender value tables.