China offshore tax move hits Hong Kong insurers, AIA drops 8.2%
Why it matters: A 20% tax on some offshore policy returns could curb mainland demand for Hong Kong insurance and other cross-border products.
Hong Kong-listed insurers slid on Aug. 6 after reports that mainland Chinese tax authorities began collecting a 20% personal income tax on returns from offshore insurance policies, adding to Beijing's wider crackdown on offshore wealth structures. AIA fell 8.2%, Prudential dropped more than 5% in Hong Kong after a 13% fall in London, and FWD Group lost 4.5%, helping push the Hang Seng Index down more than 2% in early trade. Caixin reported that authorities in Beijing and Hangzhou were taxing income from Hong Kong policies, including dividend payouts and interest on prepaid premiums. The move follows new rules issued July 24 on offshore trusts, with families told to declare and pay outstanding amounts on assets transferred into such trusts since early 2023 by Oct. 22.