With less than a week left until a 90-day grace period expires for Chinese tax residents to declare historical offshore trust assets as part of a new tax law, wealth clients who have assets placed offshore through Hong Kong need not worry, so long as their structures are compliant and of substance, Dixon Wong, group managing partner, Hong Kong CEO, U&I Group Limited, tells Asian Private Banker.

“Against a backdrop of greater global tax transparency and cross-border reporting, clients are likely to place even more emphasis on substance, governance, compliance and the suitability of their structures – not tax alone,” he said.

Wong is one of an increasing number of independent wealth managers helping HNW clients with their concerns regarding China’s new tax laws.

Announced in July 2026, the new rules apply a 20% individual income tax on capital gains resulting from transfers of appreciated property into offshore trusts, as well as on trust income generated throughout its lifecycle.

“It should not be interpreted as a 20% tax on the gross value of every offshore asset,” Wong emphasised.

“Illiquid overseas assets, such as private-company shares, private-equity interests and real estate, are a particular concern,” he added.

Business owners are already making moves to cover their tax positions before the 22 October 2026 deadline. In September, the co-founder of hotpot chain Haidilao sold US$350 million worth of shares for “shareholder funding needs,” according to a Bloomberg report that cited a filing. The company’s share price fell to 2022 lows following the sale.

Uptick in enquiries

In light of the recent tax laws, his firm has seen an uptick in enquiries about tax residency, historical transfers, and the valuation of assets, he said, with concerns surrounding “reporting obligations, and the availability of cash to meet tax payments,” also adding to clients’ concerns, Wong added.

“The reported 20% individual income-tax treatment is generally understood to concern gains arising from the transfer of appreciated property into an offshore trust, together with certain trust income and other relevant events during a trust’s life cycle,” he explained.

With some U/HNW Chinese individuals seeking foreign residencies to skirt the new rules or piling into insurance policies to ensure liquidity down the line, the long-term effects on Hong Kong remain minimal, Wong said.

“[Hong Kong’s] policy direction remains supportive,” he said, pointing to announcements such as the city’s carried interest bill as positive steps forward.

“Hong Kong’s role as a well-regulated platform for banking, investment management, professional advice and family-office activity remains highly relevant,” he added.

With many ultra and high net worth (U/HNW) Chinese individuals wondering how to structure their wealth held in Hong Kong, the city should not be “characterised” as a tax shelter, he said

“It is better understood as an internationally connected and well-regulated wealth management and family-office centre, supported by a common-law framework, sophisticated professional services, deep capital markets and close connectivity with mainland China,” he explained.

More than just wealth

Wong heads a Hong Kong-based independent wealth manager that works extensively with U/HNW clients from Mainland China. He did not disclose the firm’s AUM.

U&I Group, which is currently building out its external asset management business, mainly specialises in professional cross-border advisory. Its wealth management business is one of its business lines, with the firm also offering other services to differentiate itself from the competition.

“These include corporate and company-secretarial support, accounting and audit coordination, legal and tax support, governance, trust and succession planning, and related advisory services,” Wong said.

The EAM business, he added, builds on that foundation by “adding wealth management capabilities and helping clients coordinate their banking and investment arrangements alongside their wider structuring and family-wealth needs.”

Talent at the ready

Like an increasing number of independent wealth managers, the firm is also building out its EAM team through private bank hires, Wong said.

This is because private bank-trained relationship managers bring a “strong client-service mindset” and already understand how to construct portfolios.

“They also help strengthen the EAM business by bringing familiarity with the way private banks operate – their custody, investment and service frameworks – and by helping us work more effectively alongside banking partners for the benefit of clients,” Wong added.