Announcement No. 21 establishes taxing points at three stages of an offshore trust’s life. All three apply the 20% proportional IIT rate, but the tax character and the tax base differ materially at each stage, and the distinction drives the numbers:⁸

From 1 January 2026, a resident individual who settles property into an offshore trust is treated as making a deemed transfer of that property. Tax is charged as property-transfer income on the market value of the property less its original cost and reasonable expenses. Settling RMB 100 million of assets therefore does not of itself create RMB 20 million of tax: the base is the embedded gain, not the gross value. Resident settlors file between 1 March and 30 June of the following year; a non-resident individual with a PRC tax obligation on settlement files within 15 days of the month following the settlement.

Income arising during the life of the trust that is attributable to a resident individual is divided between property-transfer income and interest, dividend and bonus income according to its nature, and declared annually in the same 1 March to 30 June window for the preceding year.

On termination, the liquidation gain is taxed as interest, dividend and bonus income, with filing due within 15 days of the month following completion of the liquidation. Where payment presents genuine difficulty, tax may, upon filing with the tax authority, be paid in equal instalments over up to five years.

(a) Unpaid tax arising from the deemed property transfer on settlements made by resident individuals between 1 January 2023 and 31 December 2025 (and by non-resident individuals between 1 January 2023 and the implementation date) must be declared and paid within 90 days of implementation. Declarations made within the window attract no late-payment surcharge.

(b) Income arising during the subsistence of a trust before 1 January 2026 is declared within the same window and taxed under the “interest, dividends and bonuses” category at 20%, regardless of the underlying income type, again without surcharge.

(c) Where the unpaid amount is large, the tax authority may extend the recovery period in accordance with the Tax Collection and Administration Law. After the window closes, ordinary consequences apply: recovery with a late-payment surcharge and, where the conduct is characterised as tax evasion, fines of 0.5 to 5 times the underpaid tax, with no time limit on recovery.⁹

Beyond the lifecycle rules, Announcement No. 21 contains three sets of provisions that bear directly on the structures this guide is diagnosing:

(a) Deemed distributions: benefits derived from a trust settled by a non-resident may be treated as distributions to a resident individual where trust assets are used to secure the individual’s debts, fund personal expenses, provide loans or low-cost use of property, or channel benefits through third parties. Informal “use without distribution” arrangements are squarely within the regime.

(b) Controlled offshore entities: the rules define the offshore entities within scope using, among other tests, a 25% control threshold, substantive-control tests, and substance and passive-income criteria. Interposing holding companies beneath the trust does not, by itself, take income outside the regime.

(c) Tax residence: an individual who has acquired foreign nationality or overseas long-term or permanent residence may still be treated as a domiciled resident individual where their main economic interests derive from China. A foreign passport, without genuine relocation of economic life, does not displace the regime.

Announcement No. 15 adds extensive reporting requirements, including trust documentation, asset information, organisational structure and financial records. The compliance burden is informational as much as financial.

Three practical observations follow. First, the window is short and the required analysis is not: establishing what was settled, when, at what value and cost basis, and what income has arisen requires trustee cooperation and document collection that routinely takes weeks. Second, the announcements change the tax arithmetic of every restructuring option discussed later in this guide: settling assets into a new trust is now itself a deemed-transfer event, and unwinding an old trust triggers the termination-stage charge. Third, market reaction has been immediate, with advisers across Hong Kong and Singapore reporting a surge of enquiries and, in some cases, anticipated share disposals to fund compliance.¹⁰

【D&A Insight】 For most families with legacy structures, the central question between now and late October 2026 is no longer abstract (“can my structure withstand review?”) but concrete: declare within the window, and on what basis, or take a defensible position that no tax is due, documented well enough to survive later scrutiny. Both paths require the diagnostic set out in Sections IV and V, compressed into weeks rather than months.

(a) Extended retrospective reach: the 2022 to 2024 tax years sit within the standard three-year recovery period for underpayments, which may extend to five years, with no time limit where the conduct is characterised as tax evasion. Announcement No. 21 additionally permits extension where large amounts remain unpaid. Prudent practice is to review at least five years of offshore income history.

(b) Phased enforcement rhythm: a standardised flow of reminder notice, self-review window, then formal investigation has been applied in multiple regions. The 90-day window follows the same logic at a national, statutory level. Non-response is increasingly treated as an indicator of intent rather than inadvertence.

(c) Diversified data sources: CRS exchange data, customs and SAFE data, listed-company disclosures, related-party filings, and cooperation with offshore trustees, matched on a risk basis across streams.

According to Ministry of Finance data, PRC personal income tax revenue grew by approximately 11.5% in 2025, reaching RMB 1.62 trillion, after declining 1.7% in 2024 to RMB 1.45 trillion. ¹¹The swing was driven substantially by strengthened administration and compliance recovery, including tax on offshore income, rather than by rate increases: a model that favours continued enforcement intensity.

(a) “A foreign passport or permanent residence prevents PRC tax residency.” PRC individual tax residence arises through domicile or the statutory day-count rules, and Announcement No. 21 now expressly provides that an individual who has acquired foreign nationality or overseas long-term or permanent residence may still be treated as a domiciled resident where their main economic interests derive from China.

(b) “Fragmenting accounts below a threshold avoids CRS reporting.” The CRS framework imposes no de minimis balance threshold for individual accounts.

(c) “Moving assets to non-CRS jurisdictions solves the problem.” Non-CRS jurisdictions attract heightened scrutiny under anti-money-laundering frameworks,and outbound transfers face enhanced due diligence at the receiving end. Funds can become trapped rather than protected.

(d) “Multilayered corporate ownership obscures the controlling person.” CRS due diligence requires financial institutions to look through each layer to identify ultimate controllers, and Announcement No. 21’s controlled-entity rules apply the same logic for tax purposes.

For entrepreneurs holding listed red-chip equity through offshore trusts, the CSRC’s transparency expectations have risen materially since the Trial Administrative Measures for Overseas Securities Offering and Listing came into effect, ¹²covering identification of ultimate controllers down to the natural-person level, alignment of distributions and share-sale disclosures with the original filing position, disclosure implications of trust amendments and beneficiary changes, and compliance during lock-up and window periods. Where a red-chip founder’s trust holds a meaningful stake, three review streams (PRC tax, CSRC, and the offshore trustee’s own compliance) now run in parallel.

【D&A Insight】 “I already have a trust” is not the same as “I am already compliant.” Under 2026 standards, a compliant offshore trust must satisfy three dimensions simultaneously: records capable of independent audit, roles and decisions that can be independently substantiated, and every asset injection and distribution supported by an explainable economic rationale. A failure on any one creates look-through exposure, and under Announcement No. 21 that exposure now carries a filing deadline.

For most of the past two decades, Hong Kong was treated as a service hub for offshore structures rather than as a substantive trust jurisdiction: trusts were settled in Jersey, Bermuda, Cayman or the BVI, assets held through BVI or Cayman companies, and Hong Kong supplied the family office seat and the banking relationships. Two structural shifts have changed that picture.

The Trust Law (Amendment) Ordinance 2013, effective 1 December 2013, was the first substantial overhaul of Hong Kong’s Trustee Ordinance since 1934. ¹³Key features:

(a) Settlor reserved powers: a settlor may reserve investment and asset-management powers without invalidating the trust.

(b) Perpetual trusts: the rule against perpetuities was abolished for private non-charitable trusts, comparable to Cayman (150 years for ordinary trusts), the BVI (360 years) or Jersey (no fixed period).

(c) Forced heirship protection: foreign forced-heirship rules do not affect the validity of lifetime transfers of movable property into trusts expressly governed by Hong Kong law.

(d) Statutory duty of care: professional remunerated trustees may not exclude liability for wilful misconduct, gross negligence or fraud.

(e) Enhanced beneficiary protection: beneficiaries may remove trustees through a simplified statutory process.

Hong Kong applies a territorial basis of taxation. There is no capital gains tax, no dividend withholding tax, no estate duty (abolished in 2006), and Hong Kong itself imposes no general tax on distributions from Hong Kong trusts to beneficiaries. Beneficiaries may of course be taxed in their own jurisdictions of residence: a PRC-resident beneficiary’s receipts fall to be analysed under PRC rules, including Announcement No. 21.

One qualification has become essential since 2023: the foreign-sourced income exemption (FSIE) regime. Foreign-sourced dividends, interest, intellectual property income and disposal gains received in Hong Kong by an entity that is a member of a multinational enterprise group are chargeable to profits tax unless the economic substance requirement, the participation exemption, or another exception applies. Holding companies sitting under trust structures are typically within scope. Any plan that re-domiciles a holding company into Hong Kong, or routes distributions through Hong Kong, must be tested against FSIE before exemption is assumed: the applicable exemption and substance conditions require structure-specific analysis.

The Inland Revenue (Amendment) (Tax Concessions for Family-owned Investment Holding Vehicles) Ordinance 2023 introduced a 0% concessionary profits-tax rate for the qualifying assessable profits of eligible family-owned investment holding vehicles and family-owned special purpose entities arising from qualifying transactions: a targeted concession, not a blanket exemption for the family office. A Bill gazetted on 12 June 2026 and introduced into the Legislative Council on 24 June proposes to broaden the qualifying investments to cover precious metals, loans and private credit investments, and digital assets.

As of end-2025, Hong Kong hosts 3,384 SFOs, an increase of 681 (roughly 25%) over two years, with more than half in wealth tiers of USD 51 million and above and more than half reporting second-generation members in leadership positions.¹⁶

The company re-domiciliation regime is a significant addition to the restructuring toolkit. ¹⁷It permits qualifying foreign-incorporated companies (typically Cayman, BVI or Bermuda holding companies) to migrate their place of incorporation to Hong Kong without dissolution and re-formation, preserving corporate identity, contracts, licences and existing share structures; the Companies Registry ordinarily aims to complete approval within about two weeks of receiving all required documents. For families, this enables migration of an existing offshore holding company under a trust into Hong Kong, which may facilitate access to Hong Kong’s treaty network (subject to tax residence, the relevant treaty and anti-abuse requirements, and to the FSIE analysis above), and improves alignment between the corporate situs and the place from which a family business is actually managed.

The New CIES, relaunched on 1 March 2024, provides a residency-by-investment route requiring HKD 30 million of qualifying investment: at least HKD 27 million in permissible assets plus HKD 3 million into the designated CIES Investment Portfolio. Real estate may count within caps that have been progressively relaxed: following the 2025 Policy Address, residential property with a transaction price of HKD 30 million or above may be counted up to HKD 10 million, and non-residential property up to HKD 15 million, subject to a combined property cap of HKD 15 million. As at 28 February 2026, InvestHK reported 3,166 applications with expected investment of approximately HKD 95 billion.¹⁸

Eligibility matters for this readership: the New CIES is open to foreign nationals and to Chinese nationals who have obtained permanent residence abroad, among other specified categories; it is not simply open to an ordinary mainland Chinese national. Relocation also interacts directly with the Announcement No. 21 analysis: a change of tax residency does not erase historical PRC obligations, the main-economic-interests test can preserve PRC residence notwithstanding a foreign status, and the timing of any residency change relative to settlements and distributions requires careful sequencing.

The case concerned a series of discretionary family trusts established decades ago for the benefit of two family branches (“A” and “B”). In the 1990s, common-form provisions for the appointment of protectors were added. In 2017, the trustees proposed a significant restructuring of the trusts; certain elements required protector consent, and the protectors declined to give it. The “A” branch argued that the protectors’ role was confined to asking whether a reasonable body of properly informed trustees could make the proposal (the Narrow Role); the “B” branch argued the protectors had an independent discretion to assess the substantive merits (the Wider Role). The Bermuda Supreme Court and Court of Appeal both adopted the Narrow Role view; the Privy Council unanimously reversed.

Many of the trust deeds we have encountered for PRC clients established between 2010 and 2020 are silent on the precise scope of protector consent, and many settlors operated on an implicit assumption that the protector would, in practice, follow the settlor’s wishes. X Trusts destabilises that assumption in three ways:

(a) Operational risk: a protector who genuinely exercises independent judgment can, and is now expected to, block trustee proposals on substantive grounds. Trustees can no longer assume protector consent will follow as a matter of course.

(b) Control-analysis risk: if the protector is, in practice, taking instructions from the settlor rather than exercising independent judgment, the structure looks more like one in which the settlor retains real control, inviting analysis along the lines of Pugachev, where the English High Court held on construction that the settlor remained the beneficial owner of the trust assets, with sham as an alternative basis.²¹ Note that these are distinct enquiries: X Trusts concerns the nature of a fiduciary consent power; Pugachev concerned the true effect of exceptionally broad protector powers under the governing law; and a PRC tax attribution under Announcement No. 21 does not of itself invalidate the trust for creditor or succession purposes. Tax attribution, trust validity and asset-protection effectiveness must be analysed separately.

(c) Documentation risk: protectors who wish to discharge their duties properly must record their deliberations. Older trusts with limited protector documentation may be unable to demonstrate, retrospectively, that the role was properly discharged at prior decision points.

Major offshore firms, including Appleby, Conyers, Bedell Cristin, Collas Crill, Harneys, Ogier, Mourant and Walkers, have published guidance since the decision. ²²Three points of consensus emerge: where a settlor intends a narrow supervisory role, the deed must say so expressly, ideally listing the factors the protector may take into account; trustees should engage protectors substantively during the formulation of proposals, not merely at the final consent stage; and protectors should record the basis of consent or refusal, not merely the outcome. Generic “consent given” minutes are unlikely to discharge the fiduciary duty in the post-X Trusts environment.

【D&A Insight】 Every existing trust deed for a PRC client should now be reviewed against X Trusts. The two key questions: (i) does the deed expressly confine the protector’s role, and (ii) if it is silent, does the family understand that, absent contrary wording, the protector likely holds a substantive discretionary mandate? Where the family’s actual expectation diverges from the legal position, the deed should be amended, not the practice.

We recommend that clients carry out a systematic diagnostic of their existing structures immediately, and in any event before the Announcement No. 21 window closes. The following five questions reflect the angles most commonly relied upon in due diligence work.

Excessive settlor control is one of the most important recurring grounds for look-through scrutiny. Where a settlor retains powers of revocation, investment direction, or removal of trustees, or exerts substantive influence over the trustee through side agreements or verbal arrangements, the trust may be characterised as:

(a) A structure in which, on construction or as a sham, the settlor remains the beneficial owner, following the reasoning in Pugachev

(b) A bare trust or nominee arrangement, with assets still attributed to the settlor personally

(c) A structure whose practical operation undermines the independence the deed assumes. On this point precision matters: in Zhang Hong Li v DBS Bank (Hong Kong), the Hong Kong Court of Final Appeal upheld the effectiveness of anti-Bartlett clauses and found no residual “high level supervisory duty” had been breached. ²³Those clauses protect the trustee from civil liability; they do not answer a PRC tax or control analysis, which turns on where control lies in fact. A structure can be sound as a matter of Hong Kong trust law and still be looked through for PRC tax purposes.

Some retention of powers is now permitted by statute in many jurisdictions, including Hong Kong (post-2013), Cayman, the BVI, Bermuda and Jersey, if the deed expressly authorises it. The risk lies in the gap between what the deed says and what the family actually does. And the enquiries must be kept separate: look-through for PRC tax purposes does not automatically dissolve creditor or succession protection under the governing law, and a structure that survives a sham challenge may still generate PRC tax liabilities. Each protection must be analysed on its own terms.

Three recurring problems:

(a) Natural-person trustee arrangements: in a widely reported PRC testamentary trust dispute, a natural-person trustee lacked the professional capability required at the execution stage, leading to disputes and ultimately a consensual termination. ²⁴While a domestic case, the “trust does not equal competence” point applies equally offshore.

(b) Affiliated trustee arrangements: where a Private Trust Company controlled by family members is appointed without adequate governance ring-fencing, the trustee may be treated as a mere shadow of the settlor.

(c) Under-engaged institutional trustees: “low-touch” administration with minimal substantive engagement creates exposure under the X Trusts line of reasoning, particularly where the trustee defers reflexively to settlor or family wishes.

For each existing trust, the diagnostic should establish:

(a) Whether the deed expressly defines the protector’s role. If silent, X Trusts strongly supports the Wider Role as the starting point, subject to the governing law and the construction of the particular instrument

(b) The protector’s recorded deliberations on prior consent decisions, and whether those records would demonstrate independent fiduciary judgment under scrutiny

(c) The protector’s professional capability, conflicts management and resourcing

(d) The selection mechanism for replacement protectors

We recommend a transaction-by-transaction review of every asset injected into the trust:

(a) Whether settlements made between 1 January 2023 and 31 December 2025 give rise to unpaid tax on the deemed property transfer that must be declared within the 90-day window, and on what valuation and cost basis

(b) Whether the outbound capital path complied with the FX regulations in force at the time

(c) Whether the injection coincided with any undeclared taxable event (unwinding of nominee shareholdings, pre-distribution of dividends, or equity transfers at off-market prices)

(d) Whether asset valuation is supported by independent third-party documentation

(e) Whether any element of the path triggers reporting obligations under the AML or beneficial ownership regimes of the receiving jurisdiction

This is the area of most retrospective surprise: structures defensible against the regulations in force at the time of injection may not survive a 2026 review, and it is now the area with a statutory deadline attached.

Including, but not limited to: historical trustee minutes, resolutions and correspondence; internal investment rationales and external professional opinions; distribution requests and execution records; protector deliberations (particularly important post-X Trusts); CRS reporting working papers and tax support files; communications with settlor and beneficiaries; and independent valuation reports and accounting records.

【D&A Insight】 The PRC legal system does not recognise an attorney-client privilege equivalent to that found in common law jurisdictions, but it does impose statutory duties of lawyer confidentiality.²⁵ This distinction can magnify document risk in cross-border disputes and tax cooperation. Filing and archiving should be approached on the assumption that, one day, the materials may be reviewed by an independent third party.

Any of the following should trigger a professional review immediately:

(a) Now, for any structure into which assets were settled, or under which income has arisen, since 1 January 2023: the Announcement No. 21 declaration window closes on or around 22 October 2026, and the analysis must be complete before a filing decision can be made.

(b) Receipt of a reminder notice, self-review notice, or enquiry from the PRC tax authority

(c) Actual or planned changes in family members’ tax residency

(d) A listed company held through the trust undertaking share sales, refinancing, restructuring, or new offerings

(e) Change of trustee or protector, or protector provisions silent on the scope of the role (a post-X Trusts review priority)

(f) More than three years since the last professional review, or material changes in the family’s asset composition

(a) Documentation Stage: collect trust deeds and amendments, letters of wishes, historical resolutions, CRS reporting working papers, asset injection evidence, protector deliberation records, and accounting and valuation files.

(b) Governance Stage: map the power allocation among settlor, trustee, protector and beneficiaries; apply the X Trusts starting point to the protector role; identify substantive-control risk points; compare de facto practice against the deed.

(c) Tax Diagnostic Stage: quantify potential declarations for settlements (on a deemed-transfer basis) and trust income from 2023 onwards under Announcement No. 21, together with supplementary filings for earlier years where relevant; assess deemed-distribution and controlled-entity exposure; map interaction with Hong Kong or Singapore tax positions of relocated members; develop a window-filing or defence strategy, including instalment applications where appropriate.

(d) Restructuring Recommendation Stage: deliver a written report with executable proposals: deed amendments, protector refresh, trustee migration, Hong Kong re-domiciliation of intermediate companies, and recalibration of distribution practices, each costed against the post-July 2026 regime.

An effective review typically requires offshore counsel (governing-law and post-X Trusts expertise), Hong Kong counsel (trust law, the SFO regime, re-domiciliation, FSIE and CSRC compliance), PRC tax advisers (Announcement No. 21 window declarations, CRS coordination, audit response), and accountants and trustees (account reconstruction, independent valuation, compliance archiving). The D&A cross-border legal services platform draws on a collaborative network across the Yangtze River Delta, Hong Kong and multiple offshore jurisdictions to provide an integrated diagnostic and restructuring service, including trust structure compliance diagnostics, Announcement No. 21 window analysis and declarations, X Trusts protector reviews, CSRC compliance interface for red-chip structures, Hong Kong re-domiciliation execution with FSIE assessment, and implementation support for deed amendments, situs migration and trustee changes.

In 2026, the core question facing Chinese HNW clients is no longer “Should I set up an offshore trust?” but “Can the trust I have already established withstand the scrutiny of this era, and what must be filed before the window closes?”

The 24 July 2026 announcements have replaced an enforcement campaign with a statutory regime and a deadline. The X Trusts decision has reset the starting point for protector consent powers. Hong Kong has evolved from a service hub into a substantive jurisdictional option, with tools (the SFO regime, the re-domiciliation regime, an expanded family office ecosystem) that change the strategic map. The D&A cross-border team recommends that families with legacy structures complete a systematic diagnostic and reach a declaration or defence decision before the 90-day window closes in late October 2026, converting uncertainty into manageable compliance boundaries. For families with red-chip listings, multiple jurisdictions, settlements or distributions since 2023, or protector provisions unreviewed since setup, the case for action is particularly strong.

END

This is the first article in the D&A Cross-Border Trust Series. Forthcoming installments will cover the practical operation of the Announcement No. 21 declaration window, the wider implications of X Trusts for Asian family wealth, dual tax-residency reporting under CRS 2.0, Hong Kong family office compliance, and red-chip restructuring case studies.

This article reflects the law and publicly available guidance as at 12 August 2026.

This article is intended to provide a general guide to the subject matter and does not constitute legal or tax advice. Specialist advice should be sought about your specific circumstances.

参考文献

【1】Bloomberg News, “China Targets Offshore Trusts in Tax Crackdown on Rich”, 31 March 2026 (updated 27 May 2026), reporting Shanghai enquiries from early 2025 followed by demands in Jiangsu, Shenzhen and other regions.

【2】State Taxation Administration, “Tax authorities disclose three cases of individual taxpayers failing to lawfully complete annual individual income tax reconciliation and evading tax” (税务部门曝光3起自然人纳税人未依法办理个人所得税综合所得汇算偷税案件), 16 June 2025, naming the individual taxpayers and penalties imposed.

【3】Announcement of the Ministry of Finance and the State Taxation Administration on Individual Income Tax Matters relating to Offshore Trusts (MOF/STA Announcement [2026] No. 21) and Announcement of the State Taxation Administration on Administrative Matters relating to Individual Income Tax on Offshore Trusts (STA Announcement [2026] No. 15), both issued and effective 24 July 2026.

【4】Institute of International Finance estimate of approximately USD 807 billion of 2025 outflows, as reported by Bloomberg News, “China Expands Outbound Investment Rules to Cover Individuals”, 3 June 2026. The figure is a third-party estimate rather than an official SAFE statistic.

【5】A and 6 others v C and 13 others [2026] UKPC 11 (19 March 2026), on appeal from the Court of Appeal of Bermuda. Reporting of the underlying facts is restricted by a privacy order; the case is generally referred to as the X Trusts case.

【6】Financial Services and the Treasury Bureau and InvestHK, Market Study on the Family Office Landscape in Hong Kong, conducted by Deloitte, released 10 February 2026; Chief Executive, 2025 Policy Address, target to assist no less than 220 family offices to establish or expand in Hong Kong from 2026 to 2028.

【7】Companies (Amendment) (No. 2) Ordinance 2025, in operation from 23 May 2025.

【8】MOF Tax Policy Department and STA Income Tax Department, official press Q&A on Announcement No. 21, 24 July 2026, addressing the tax character and base at each stage and the filing mechanics.

【9】Tax Collection and Administration Law of the PRC, Articles 52 (recovery periods) and 63 (tax evasion: recovery of tax and surcharge plus fines of 0.5 to 5 times the underpaid tax).

【10】CNBC, “Wealthy Chinese race for tax advice as Beijing targets offshore trusts”, 5 August 2026.

【11】Ministry of Finance, 2025 fiscal revenue release (January 2026): individual income tax RMB 1.62 trillion, up 11.5% year on year. Comparative: 2024 individual income tax RMB 1.4522 trillion, down 1.7% (MOF, January 2025).

【12】Trial Administrative Measures for Overseas Securities Offering and Listing by Domestic Enterprises (CSRC), effective 31 March 2023.

【13】Trust Law (Amendment) Ordinance 2013, in operation from 1 December 2013.

【14】Inland Revenue Ordinance (Cap. 112), foreign-sourced income exemption (FSIE) regime, effective 1 January 2023 and expanded from 1 January 2024 to cover disposal gains on all asset types.

【15】Inland Revenue (Amendment) (Preferential Tax Regimes for Funds, Family-owned Investment Holding Vehicles and Carried Interest) Bill 2026, gazetted on 12 June 2026 and introduced into the Legislative Council for first reading on 24 June 2026.

【16】Financial Services and the Treasury Bureau and InvestHK, Market Study on the Family Office Landscape in Hong Kong, conducted by Deloitte, released 10 February 2026.

【17】Companies Registry, “Company re-domiciliation opens for application”, 23 May 2025; Companies Registry, Company Re-domiciliation Regime — Frequently Asked Questions.

【18】2025 Policy Address, 17 September 2025 (current property caps). As at 28 February 2026, InvestHK reported 3,166 applications under the New CIES with expected investment of approximately HKD 95 billion.

【19】Cayman Islands Foundation Companies Act (2025 Revision); Foundations (Jersey) Law 2009; Conyers, Bermuda: Private Client (2nd ed.), noting that Bermuda law does not provide for domestic foundations.

【20】A and 6 others v C and 13 others [2026] UKPC 11 (JCPC, 19 March 2026), on appeal from the Court of Appeal of Bermuda.

【21】JSC Mezhdunarodniy Promyshlenniy Bank v Pugachev [2017] EWHC 2426 (Ch). The High Court held on construction that the settlor remained the beneficial owner of the trust assets, with sham as an alternative basis.

【22】See, for example, Walkers, “Consent as control: the rise of the powerful protector” (20 March 2026); Collas Crill, “Mind the gap: why the wider role prevails for protectors” (26 March 2026); Appleby, “Privy Council Decision in X Trusts: Redefining the Role of the Protector” (27 March 2026); and Ogier, “Clarifying the protector’s role: key takeaways from the Privy Council’s 2026 judgment” (9 April 2026). Cayman commentary expressly notes that the decision, while highly persuasive, is not strictly binding on the Cayman courts.

【23】Zhang Hong Li v DBS Bank (Hong Kong) Ltd [2019] HKCFA 45.

【24】Shanghai No. 2 Intermediate People’s Court, (2019) Hu 02 Min Zhong No. 1307 (judgment of 30 May 2019), widely described as the PRC’s first testamentary trust case. The natural-person trustees were non-professionals, and subsequent proceedings concerned delays in collecting trust property and paying trust benefits; the trust was ultimately terminated by agreement between the trustees and beneficiaries, with the estate distributed under statutory succession. See 21st Century Business Herald (21世纪经济报道), “首案终止收场 遗嘱信托前路何方？”, 12 February 2025.

【25】PRC Lawyers Law, Article 38 (statutory lawyer confidentiality duty); DLA Piper, Legal Professional Privilege – China, explaining that PRC law does not recognise legal professional privilege in the common-law sense.

【26】Supreme People’s Court, Interpretation (II) on the Marriage and Family Book of the Civil Code, Fa Shi [2025] No. 1, issued 15 January 2025 and effective 1 February 2025.

【27】OECD Global Forum, Peer Review of the Automatic Exchange of Financial Account Information 2025 Update (OECD, December 2025), noting that 84 of 124 jurisdictions plan to commence exchanges under the amended CRS in 2027, while others use a transitional period.

【28】Harneys, Guide to VISTA Trusts (April 2024), explaining the default absence of a trustee duty to monitor or interfere with management of the underlying BVI company; Cayman Islands General Registry, “Types of Trusts — The Special Trusts Alternative Regime Law (STAR)”, describing STAR trusts for persons, purposes or both.