Four Chinese tycoons just transferred US$17 billion of their wealth to trusts as government toughens up tax regime
- Sunac’s founder Sun Hongbin, Longfor’s Chairwoman Wu Yajun, and the magnates of Dali Foods and Zhou Hei Ya all transferred their wealth to trusts
Four Chinese tycoons transferred more than US$17 billion of their wealth into family trusts late last year, underscoring how the rich are scrambling to protect their fortunes from the nation’s newly toughened tax regime.
The latest example came from billionaire Sun Hongbin, chairman of real-estate developer Sunac China Holdings, who disclosed in a filing in Hong Kong on January 12 that he shifted most of his stake in the company to South Dakota Trust on December 31.
All of the four Hong Kong-listed companies but Sunac cited succession planning as the purpose of the transfers. The ownership structures of all four tycoons involve entities in the British Virgin Islands. Representatives at the firms did not immediately respond to requests for comment.
China faces tidal wave of exits by ageing tycoons. Their succession plans will shape China’s future
The moves come as China’s super rich brace for the possibility of the government going after the wealthy to push through tax cuts for the masses this year. Personal wealth ballooned to an estimated US$24 trillion in 2018, making the rich ripe for further scrutiny from tax collectors, and prompting many families to seek refuge via shields such as trusts.
“Offshore trusts may not avoid taxes entirely, but they may to some extent win more tax deferral space for billionaires,” said Oscar Liu, chief executive officer at Noah International Holdings (Hong Kong), an asset-management service provider.
