CHINA Law and Practice Contributed by: Chengchen Gan (Mark), Commerce & Finance Law Offices
2.5 Transfer of Property For inheritance matters in China, there is currently no inheritance tax or gift tax imposed. However, if an inheritor sells inherited real estate or vehicles, they are subject to individual income tax. Additionally, when inheriting property, stamp duty is required to be remit - ted. Specifically, statutory heirs inheriting land or property rights are exempt from deed tax; whereas non-stat - utory heirs inheriting land or property rights through a will are considered as having received gifts and are subject to deed tax. Regarding transfers of assets during one’s lifetime, individual income tax is applicable, but exemptions are provided for transfers between close relatives. For instance, according to State Administration of Taxa - tion Announcement No 67 of 2014, transfers of equity to spouses, parents, children, grandparents, grand - children, siblings, as well as caregivers with direct nur - turing obligations, are exempt from individual income tax if transferred at nil consideration. Similarly, exemp - tions exist for the incidental income tax on gratuitous transfers of real estate between close relatives (see details in 1.1 Tax Regimes ). 2.6 Transfer of Assets: Vehicle and Planning Mechanisms Currently, there is no inheritance tax or gift tax in Chi - na, so there is no requirement to pay corresponding taxes when transferring assets to the next generation. If such taxes are legislated in the future, China might refer to models from other countries. It is recommended that high net worth families estab - lish family trusts for tax planning purposes. This approach can potentially reduce the burden of inher - itance and gift taxes. By establishing trust terms, fami - lies can also exert control over the use and distribu - tion of assets, thereby minimising tax liabilities to the greatest extent possible. 2.7 Transfer of Assets: Digital Assets In China, according to Article 124 of the PRC Civil Code, virtual property can be inherited in accordance with the law. Practices typically follow provisions in laws such as the Data Security Law and the Personal
pretations, both parties have the right to change their minds before formal divorce proceedings. Postnuptial Agreements Similar to prenuptial agreements, property-related clauses are binding on both parties unless there are on invalid grounds. Any unilateral donation of jointly owned property by one spouse without the consent of the other is con - sidered invalid. Agreements that contradict general public norms or those that go against social morality are deemed inva - lid. Specifically, clauses regarding fidelity obligations between spouses are not automatically valid and often enforceable only when determining compensation for mental damages. These agreements play a crucial role in regulating property rights between spouses under Chinese law, providing legal clarity and protection in various marital situations. New Developments in 2025 Notably, the Supreme People’s Court’s Interpretation, effective 1 February 2025, refines the rules on marital property in China. The new rules highlight property division issues for new forms of relationships, such as cohabitation, and set more nuanced standards for dividing jointly acquired assets based on each party’s contribution. For marital real estate and parental gifts, division now depends more on the intent, the source of the asset, and other equity factors. Critically, one spouse may not dispose of significant marital property without the other’s consent ‒ recent guidance even treats excessive “tipping” to online streamers using joint funds as wasteful conduct, justifying an unequal division of assets. The interpretation also strengthens protections for vulnerable parties by allowing courts to grant compensation for care-giving or support to spouses facing hardship. These advances aim to bet - ter balance contractual liberty, joint ownership, and fairness in the context of modern family relationships.
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