Tax havens
Some of China's wealthiest are already using trusts.
Wu Yajun, a developer with an estimated net worth of about $US7.5 billion, held almost half of her real estate empire, Cayman Islands-registered Longfor Group Holdings, through a family trust. Last month, she moved assets to another trust set up in her daughter's name, according to a filing.
Other wealthy trust holders include Zhang Shiping, who uses one in the Cayman Islands to hold a majority stake in one of China's biggest aluminum makers, China Hongqiao Group.
How trusts work
Trusts put assets under the ownership of third-party trustees. That can sometimes limit an owner's ability to make some decisions, but can also help steer away from taxes as high as 20 per cent on profits of what Chinese authorities consider "controlled foreign corporations".
Wealth planning offices aren't the only ones busied by the reforms. China's tax authority is also swamped with inquiries.
A representative for the national government's tax hotline said they are busier this year handling queries.
Alan Jia, chief executive officer at wealth-planning adviser Ishtar Consulting, started helping clients set up trusts well before the latest tax reforms came into view.
"Setting up a trust takes time," Jia said. "Many of our clients had anticipated the tax reform and reacted earlier on."
China's State Administration of Taxation didn't respond to a faxed request for comment.
In September, China implemented an international data-sharing agreement called the Common Reporting Standard, making overseas money much more visible to mainland officials.
Celebrity targets
That step meshes with a broader crackdown that swept up some high-profile wealthy Chinese closer to home.
In October, the government made an example of film and TV star Fan Bingbing, hitting her and several affiliated companies with a record $US129 million in penalties and back taxes. Other celebrities could face penalties if they don't come clean on unpaid taxes, the government said at the time.
"Some recent cases in China have further spurred panics," said Jason Mi, a partner at Ernst & Young in Beijing, who is helping clients plan for the new rules. "Chinese business people are nervously looking at what can be done at the last minute."
Bloomberg
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