China has begun imposing personal income tax on offshore trusts, targeting overseas assets held by its wealthiest families. The Ministry of Finance announced that gains in asset values such as shares and real estate will be taxed when first placed into offshore trusts, and income generated by the trusts will be taxed annually. Individuals who transferred assets into offshore trusts between 2023 and 2025 are granted a 90-day period to declare holdings and settle tax due, with a simplified reporting structure for pre-2026 income. The move aims to close a long-used tax avoidance loophole and ease fiscal pressures amid an economic slowdown and housing downturn. The changes are expected to significantly affect Hong Kong, which recently became the world's largest offshore wealth center, holding hundreds of billions of US dollars.