1, policy aspect
In terms of policies and regulations, because the domestic trust law is established according to Anglo-American law, the domestic trust law is very different from overseas trust in jurisprudence.
There is no ownership in China's property law, so there is no usufructuary right. For example, Article 15 of China's Trust Law stipulates that if the trustor is not the only beneficiary, the trust property shall not be used as its inheritance or liquidation property if the trust exists. In terms of trust transfer, it is difficult for domestic trusts to completely transfer assets such as real estate and equity in the name of trust plan due to hierarchy restrictions, so there are also difficulties at the operational level.
For overseas trust, in the trust law of Anglo-American law system, the three powers of trust property are separated, the trustee has ownership and the beneficiary has income right. However, Article 15/ 16/ 17 of the Trust Law stipulates that when the trustor and the trustee terminate, the trust property is not liquidation property, and the court may not enforce the trust property unless the trust property has been secured or its own debts have been incurred. In terms of asset transfer demand, it is easy to transfer assets abroad by using overseas trusts. For example, Wu Yajun, Pan Shiyi and others set up a trust for the shares of the company to be listed soon, which is extremely beneficial to the company's overseas listing.
2. Trust companies
As for the establishment of trust companies, overseas and domestic practices are different because of the different economic and political development environments in the two places.
Most domestic trust companies were established after the founding of the People's Republic of China. Domestic trust companies have long been oriented to the demand side of funds, rather than providing wealth management solutions for high-net-worth customers. Therefore, domestic trust companies lack experience in this area.
Most overseas trust companies come forward as consultants. According to the actual situation and needs of customers, only one of the supply trust scheme, tax scheme and scheme trust structure can charge high consulting fees. Overseas trust companies have been established for decades or even hundreds of years, with long-term operating experience and a high degree of integrity management system.
3. Inheritance tax
Overseas trust, like domestic trust, is the first choice for investors to invest in financial management. However, compared with domestic trust varieties, overseas trust can promote wealth processing and inheritance, so it is loved and sought after by family businesses and becomes a primary way of wealth transfer.
In terms of inheritance tax, although the "Provisional Regulations on Inheritance Tax" has been issued for a long time, it has not been initially collected so far, and there is no great obstacle for the domestic rich to pass on their assets to the next generation, which reduces the domestic demand for inheritance trusts. However, due to the domestic family trust has not been able to achieve the effect of asset isolation, rich families will have various disputes in the distribution of property after death, and even lead to the consequences of taking their loved ones to court.
Among overseas trusts, the most noteworthy is the good tax avoidance function. Overseas trust law protects the ownership of trust property from being transferred to the trustee, and the ownership belongs to the trustee during the whole trust legal relationship. That is to say, when the trustee dies, the property left in the trust no longer belongs to the client because of its nominal ownership, which is independent of the inherent property of the client and is not included in the total taxable estate, thus avoiding various disputes between families.
Finally, for customers, the most effective, fastest and safest wealth preservation and wealth inheritance is the best trust product, while overseas trust can give you a more correct financial management concept, technical platform and even sound legal protection, so as to maximize your investment income. I believe you should also keep up with the correct investment steps of most high net worth individuals.