At the Hubbis HNW Insurance Summit in Singapore, Junwei Han, a partner and co-head of the private wealth practice at Allen & Gledhill, set out the technical workings of China’s new offshore trust tax rules and urged caution over private placement life insurance, or PPLI. Zac Lucas, a partner in international private wealth at Spencer West LLP, chaired the session on regional tax changes and cross-border planning for wealthy Asian families.
The discussion came after China introduced rules in July covering offshore trusts held by Chinese tax residents. The transitional deadline has kept wealth managers across the region focused on the new framework since then.
Under the rules, moving shares, property and other assets into an offshore trust can trigger a 20 per cent tax on the relevant gains. Income produced by the trusts, and by offshore entities under their control, can also face a 20 per cent tax.
The framework reaches certain unpaid taxes dating back to January 2023. Taxpayers have a 90-day period to report and settle liabilities without additional late-payment charges, and that window closes on October 22.
Its provisions include disposal treatment, attribution of income to the settlor, a wider residence test and the transitional deadline. Those details matter to advisers weighing what clients must report now, and what arrangements may require closer examination.
The immediate uncertainty centres on PPLI. Han said the present debate over whether such policies fall within the rules remains provisional, with further guidance likely. The first task for the market, he said, is to establish how the offshore trust rules work before deciding whether PPLI is caught by them.
The new rules form part of a wider push to tighten China’s tax net around wealthy individuals, offshore trusts and overseas investments. That campaign has gathered momentum in 2026 as tax authorities have increased scrutiny of wealthy taxpayers, pursued back taxes from companies and individuals, and issued clearer offshore-trust rules.
China is under prolonged pressure on public finances, especially at the local government level. Beijing is seeking more dependable revenue and enforcing rules that had often been applied loosely in the past.
For Singapore’s wealth managers, the rules leave practical questions about their reach and later guidance. The scale of any effect on capital moving through the financial hub, the number of affected offshore trusts and the eventual treatment of PPLI remain unclear.
The debate is part of the broader challenge of offshore tax planning for Chinese high-net-worth individuals in an era of global transparency.
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