China's super-rich 'in shock' and hunting for cash as Beijing issues surprise tax on offshore trusts
📰 source: cnbc_topnews · 💼 business
beijing issued surprise tax on offshore trusts used by china's ultra-rich, hitting them with a 20% levy at nearly every stage of a trust's life. the rules, released july 24, apply retroactively to assets transferred since start of 2023, with a 90-day window ending oct 22 to declare and pay outstanding amounts.
families and their advisors in hong kong and singapore are scrambling. 'many clients, trustees, and advisors are still in shock,' said clifford ng of zhong lun law firm. assets held under trusts in hong kong alone reached hk$5.2 trillion in 2023, with 55% of underlying investments in mainland and hong kong. late declarations could incur surcharges.
some wealthy families are weighing selling liquid holdings like hong kong and a-share stocks to fund the bill, said ryan lin of bayfront law. citigroup economist xiangrong yu warned the retrospective window could force stake reductions. a second passport won't help — 'a second passport is not a tax plan,' said kia meng loh of dentons rodyk.
why it matters: new 20% tax on offshore trusts could force wealthy chinese families to sell stocks, hitting hong kong and a-share markets.
source: cnbc_topnews
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