China Cracks Down on Offshore Trusts to Capture Overseas Wealth

China is set to impose individual income tax on assets held in offshore trusts and the income they generate starting Friday. This move aims to close a long-standing loophole that wealthy citizens have used to protect their fortunes abroad. Offshore trusts have been a gray area in Chinese tax enforcement, prompting Beijing to take action to capture revenue from the wealth held overseas. The new regulations will subject the transfer of shares, property, or other assets into offshore trusts to a 20% tax on the appreciation in value at the time of transfer. Additionally, income from these trusts and the…