PPLI, family offices and VCCs: where the policy sits under the 13O/13U framework

The question with PPLI and a single family office (SFO) is not "one or the other" but "at which level the policy sits". It can be held by a family member personally, by a family trust, or by the family office's fund vehicle (a private company, or a sub-fund of a Variable Capital Company, VCC). Once chosen, the level determines where the benefit flows, which layer pays the premiums, how the policy's asset manager and the family office's investment team divide the work, and who is identified under CRS. This page covers only these interfaces and the questions to answer before application; the full 13O/13U conditions and VCC set-up steps are on the sister site vccfund.sg.

The three parts of a family-office structure and the key 13O/13U conditions

A typical Singapore SFO has three parts: the fund vehicle (a company or VCC holding the family's investable assets), the fund management company (a family-controlled Singapore company responsible for investment decisions) and the family itself (usually holding the fund vehicle through a trust or holding company). The fund vehicle applies to MAS for the Section 13O or 13U tax incentive; once approved, specified income from its designated investments may be exempt, subject to conditions.

MAS Circular FDD Cir 05/2026 (31 Jul 2026) provides that new SFO funds approved on or after 1 Aug 2026 are subject to updated conditions. The three most directly relevant to where the policy sits are:

Since 1 Jan 2025, every reference to a fund's AUM in MAS documents means assets under management in designated investments (AUM in DI). The MAS FAQs (updated 14 Sep 2026) add that an SFO fund may hold family-owned businesses, but such investments do not count towards the minimum AUM in DI, and that a basis period ending below the threshold does not qualify for exemption. Existing funds transition under the conditions in force at their approval; other conditions such as capital deployment and local business spending are covered on vccfund.sg.

Three ownership levels compared

No level is better in itself; the question is fit. A common order of reasoning is to ask first whether the benefit should flow to an individual, a trust or the fund, then which layer pays the premiums, and only then which level is easiest to administer as policyholder. For how the trust level works, see PPLI and trusts; for the CRS classification approach, see the IRAS CRS e-Tax Guide, Fifth Edition (11 Aug 2026).

Do policy account assets count as AUM in DI?

This is the question asked most often when linking the two structures, and the one most often answered wrongly. The MAS circular on 13O/13U (31 Jul 2026), the conditions page (updated 22 Sep 2026) and the FAQs (updated 14 Sep 2026) do not say whether a life policy is a designated investment, nor whether the assets in a policy account count towards AUM in DI. This site therefore does not say that "putting assets into a policy takes them out of AUM and outside the conditions", nor the opposite.

Only two points are certain. First, if the fund vehicle pays premiums with cash or a portfolio from within the fund, those assets legally leave the fund and enter the custody account set up for the policy. Whether the fund's AUM in DI falls accordingly, and whether it still meets the S$20 million or S$50 million threshold afterwards, must be tested before the transfer, because a basis period ending below the threshold does not qualify for exemption (MAS FAQs). Second, if a family member or trust holds the policy and premiums come from outside the fund, the question does not arise.

In practice there are three routes: a written enquiry to MAS through the family office's application adviser; a written opinion from a Singapore tax adviser; or placing the policy outside the fund in the structure. Whichever route is taken, it should be completed before the 13O/13U application or the policy application is submitted.

Two layers of investment decisions: the fund management company and the policy's asset manager

Fund layer: the family office's fund management company manages the fund vehicle's assets under the fund's investment policy. The 13O/13U requirements on the number and tax residence of investment professionals apply at this layer.

Policy layer: PPLI account assets are held in a dedicated custody account and managed under an investment mandate by an asset manager nominated by the policyholder and accepted by the insurer. The policyholder, whether an individual, a trustee or the fund vehicle, may nominate a manager and agree a mandate within what the insurer accepts, but cannot give specific buy or sell instructions; the insurer retains the final say on asset eligibility, mandate changes and disposal of assets in specified circumstances. For the investor-control rules, see Asset contribution and investment managers.

The two layers can be linked in three ways: the family office's fund management company applies to act as the policy's asset manager (it must meet the insurer's requirements on licence or exemption and location, and pass due diligence); the fund's existing private-bank discretionary team acts as manager; or a third-party manager is appointed. In every case the policy-level investment mandate must be signed separately and cannot be replaced by the fund's investment policy. Note also that the private banking account required under 13O/13U belongs to the fund, while the policy's custody account does not; the two must not be confused. For asset eligibility and mandate details, see Asset contribution and investment managers.

Five things to settle before a 13O/13U application or a policy application

1. Level and rationale: decide where the benefit flows and where premiums come from first, then the policyholder, and record the reasoning in the family office's investment policy or family charter, so that a later change of policyholder does not trigger an assignment of the policy.
2. Effect of the premium source on AUM in DI: if assets are transferred out of the fund vehicle to pay premiums, test the threshold basis period by basis period; until the classification of policy assets is confirmed, assume neither that they count nor that they do not.
3. Life assured and insurable interest: a lawyer should confirm, under s 146 of the Insurance Act 1966, how the fund vehicle's or trust's insurable interest in the life assured is established; with several lives assured, confirm each one.
4. Manager and division of mandates: who acts as the policy's asset manager, which licence and signatory documents must be submitted to the insurer, and who initiates a change of manager.
5. Reporting parties and compliance calendar: under CRS / FATCA, who is the account holder, who are the controlling persons and which institution reports; put the annual 13O/13U filings and the annual policy review in the same calendar (see Tax compliance).

What the MAS figures show, and what they do not

These figures show that the base of family offices and fund vehicles is growing, and with it the number of entities that might hold a PPLI policy. They do not show the number of PPLI policies, premiums or growth; there is no separate official statistic for PPLI. Reading context data as a conclusion about the product is the second misunderstanding this page aims to avoid. Jurisdiction: Singapore. Where family members are in other jurisdictions, take professional advice where they are tax resident. Readers who want this interpreted for their own family-office structure can register their needs through the contact details on this site.