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TVC Tax Deductible Voluntary Contributions

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  1. #81

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    Sep 2019
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    If we take the top rate of 17%, any money in TVC up to the 60k cap is now at 20% more value but subjected to the lockup.
    The HSBC bonus mentioned is interesting, but besides the HK tracker fund, I don’t remember any possible index exposure to say, foreign markets. If that additional exposure costs another 150 basis points for the closet index funds provided, then excluding bonuses would breakeven be around 12-13 years?

    I may have missed or forgotten any earlier commentary on the implications of MPF withdrawal on right to abode for PRs. Do you surrender that as well, or is there no effect? Thank you.


  2. #82

    Join Date
    Jun 2011
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    Obviously different MPF providers have different investment options. AIA which I have has a World index fund, so it gives US/Europe and Asia exposure. That's pretty much what I would suggest someone to invest in at this point. The US market has outperformed significantly from Europe/Asia over the past bull market, if anything I think this will move back more in-line in the future. I would not want to have too much USA exposure, if I attempt to "time" the allocations somewhat..


  3. #83

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    Jan 2020
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    US Citizens Not Eligible

    Just FYI, I was about to set up a TVC at HSBC and they told me anyone with US tax residency/implications is not eligible. Sure enough, it is in the fine print of their application form. Could not find anywhere else that stated such an issue, so perhaps an HSBC specific decision given that MPF funds are still exempt under FACTA and the US does not participate in the CRS.


  4. #84

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    Sep 2017
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    I noticed that as well. All that time I put in filling out forms and speaking with HSBC rep only to learn on my own that US persons are not eligible for TVC account with HSBC.

    I filled out an application with Bank Consortium Trust Company and it seems that have approved my account opening.


  5. #85

    Join Date
    Feb 2012
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    411
    Quote Originally Posted by HKProf:
    MPF funds are still exempt under FACTA
    Can you link to anything official that confirms that?

    That's too bad about HSBC with TVC accounts as my current MPF and other MPF accounts are with them. So any other Americans opened up TVC accounts with Standard Charter, ICBC (maybe they don't have them), or Citibank as I already have at least some financial relationship with those banks?

  6. #86

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    Jan 2020
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    Quote Originally Posted by loganhair:
    Can you link to anything official that confirms that?

    That's too bad about HSBC with TVC accounts as my current MPF and other MPF accounts are with them. So any other Americans opened up TVC accounts with Standard Charter, ICBC (maybe they don't have them), or Citibank as I already have at least some financial relationship with those banks?
    Yes:
    https://www.fstb.gov.hk/fsb/info/doc/fatca-faq_e.pdf;
    https://en.wikipedia.org/wiki/Common_Reporting_Standard

  7. #87
    Quote Originally Posted by HKProf:
    Just FYI, I was about to set up a TVC at HSBC and they told me anyone with US tax residency/implications is not eligible. Sure enough, it is in the fine print of their application form. Could not find anywhere else that stated such an issue, so perhaps an HSBC specific decision given that MPF funds are still exempt under FACTA and the US does not participate in the CRS.
    That's too bad about HSBC. I'm setting up TVC with AIA and doesn't seem to be a problem with them.

    As an American expat, it's amazing so much of the world simply doesn't want my money or the headaches of FACTA. Rightly so. Even telling me wrong information or straight out lies to get me to walk out the door.

    Even with all the criticism from my family members about doing the TVC because of expected returns, reportable annual US tax on MPF and whatnot, the bottom line for me is that it's still better than being initially taxed on the income by the HK government at the highest rate.

  8. #88

    Join Date
    Feb 2012
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    I've seen that linked to document, but it says "This document aims to provide background information regarding the intergovernmental agreement (“IGA”) to be signed between Hong Kong and the US for implementation of the US Foreign Account Tax Compliance Act (“FATCA”)." and "Information provided in this document will be updated according to the development regarding the signing of the IGA." So it says "to be signed".

    However, after looking further I see at https://www.fstb.gov.hk/fsb/topical/doc/HK-USIGA.pdf it appears that it was signed and other websites said there is an exemption for MPF accounts. However, as TVC accounts are a new thing and aren't mandatory I guess it still remains unclear how they'll work for Americans.

    I like balancedequatio agree that "the bottom line for me is that it's still better than being initially taxed on the income by the HK government" I'm not sure how annoying it will be with reporting and/or declarations, but I've done my best to attempt to comply with FACTA since I've been living and working in HK. I will continue to tell them (IRS and the Treasury) my whole non-US financial story, which is so annoying and almost no other countries require. How the US can pass a law within their borders and make the whole (or at least most) of the entire financial world follow their law is ridiculous.


  9. #89

    Looking to sort this TVC in the next few days.

    HSBC - can you get it set up and buy in to a fund immediately, once in a relevant branch? Could I put 60k in to the HSI tracker 2800 tomorrow and then another 60k in April 1st for next tax year? I mean can you put your 60k in at any point of the tax year?
    Thanks in advance for any help.


  10. #90

    Join Date
    Oct 2006
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    Quote Originally Posted by Chip Douglas:
    Looking to sort this TVC in the next few days.

    HSBC - can you get it set up and buy in to a fund immediately, once in a relevant branch? Could I put 60k in to the HSI tracker 2800 tomorrow and then another 60k in April 1st for next tax year? I mean can you put your 60k in at any point of the tax year?
    Thanks in advance for any help.
    pretty much yes.

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