A wider tax campaign is now reaching offshore trusts, overseas insurance and other foreign assets as banks step up reviews, freezes and compliance checks on wealthy Chinese clients.
China's new rules for offshore trusts are now part of a broader tax enforcement drive aimed at ultra-high-net-worth individuals' overseas wealth, as authorities press banks and other financial institutions to review foreign assets, verify declarations and in some cases freeze accounts until taxes are paid. The July 24 policy from the Ministry of Finance and the State Taxation Administration clarified that income generated through offshore trusts is subject to a 20% individual income tax, with families required to declare and pay tax on assets transferred into such trusts since the start of 2023 by Oct. 22. The campaign has widened beyond trusts to include capital gains and income tied to overseas real estate, stocks, precious metals, cryptocurrencies and, in some cases, overseas insurance policies. Advisers say wealthy clients are scrambling to assess exposure, raise cash and settle back taxes and penalties, while some may need to sell assets. Banks have strengthened cooperation with tax authorities, and lawyers say offshore trusts no longer function as reliable tax-planning vehicles for China-linked wealth. The tougher enforcement comes as Beijing faces fiscal strain from a prolonged property slump that has eroded land-sale revenue. Personal income tax revenue reached RMB 898.2 billion in the first half of 2026, up 13.1% from a year earlier, while analysts and advisers say the campaign could accelerate emigration planning and add to pressure for overseas capital outflows.