Prudential, HSBC tank as China widens insurance taxes

(Sharecast News) - Asia-focused Prudential and HSBC tumbled on Wednesday following a report that Chinese mainland tax authorities have started levying personal income tax on the returns of offshore insurance policies. Tax lawyers and insurance insiders told Caixin that early enforcement cases in Beijing and Hangzhou show authorities applying a 20% tax rate to returns from Hong Kong policies. The levies target dividend payouts and interest earned on prepaid premiums.

At 1250 BST, Prudential was down 9.7% at 988.40p, HSBC was 6.1% lower at 1,487.40 and Standard Chartered was 4.8% weaker at 2,141.00p.

HSBC was already under pressure earlier in the session, hit by rating downgrades by Shore Capital and Citi.