CHINA Trends and Developments Contributed by: Jun Zhang, Xiaochu Zhang and Wan Hu, Dacheng Law Offices
has called for the promotion of tax exemptions for “non-transactional transfers”. • Restructuring: the traditional “trust + SPV (limited partnership)” model needs to be restructured. It is possible to explore the application of a joint stock company to replace the limited partnership as the SPV, and the application of a class share system to realise the separation of ownership and control, as well as the allocation of the right to income. Real estate trust registry: from asset revitalisation to inclusive transformation Policy highlights: full process closure and risk isolation I) Beijing policy The “Notice of Beijing Municipal Planning and Natural Resources Commission of the State Financial Super - vision and Administration Bureau (Beijing) on the Reg - istration of Real Estate Trust Property (for Trial Imple - mentation)” (“Notice of Registration of Real Estate Trust (Beijing)”), issued on 11 December 2024, marks an important step in implementing the registration of real estate trust property in Beijing. It is expected to significantly promote the development of the real estate trust business. The Notice on Registration of Real Estate Trusts (Bei - jing) clarifies, for the first time, the scope of applica - tion of registration of real estate trusts, the handling process and the relevant requirements for the dis - position of trust property, with a view to promoting the orderly development of real estate trust business by trust institutions under the jurisdiction of Beijing. By safeguarding the standardisation, accuracy and completeness of the registration of real estate trust property, it effectively protects the lawful rights and interests of the parties to the trust. SDIC Taikang Trust completed the first residential real estate trust property transfer registration in China. The settlor put the real estate property in Tongzhou District, Beijing, into the trust, which will be used to protect the lifelong living and care expenses of their autistic child. The arrangement realises the goal of “retirement before death and inheritance after death”.
FOTIC trust used logistics warehousing facilities as the subject, of which 50% of the proceeds is for chil - dren’s education, the other 50% is donated to the public welfare, to build a dual-objective model of “wealth inheritance + charity”. II) Shanghai policy On 26 May 2025, the Notice on Pilot Registration of Real Estate Trusts (“Notice on Registration of Real Estate Trusts (Shanghai)”) was issued. Compared to the Beijing policy, a feature is that one the issuing units of the Shanghai policy is the tax authority. The Notice also mentions that real estate trust business involving relevant taxes shall be han - dled in accordance with the corresponding tax poli - cies. Although there has not been further refinement of the tax provisions, the involvement of the tax department in the launch and implementation of the Shanghai policy indicates that follow-up provisions are expected. In addition, in the Notice on Registration of Real Estate Trusts (Shanghai), “encouraging the design of trust service models around scenarios such as old age assistance, special needs, family services, public welfare and charity, risk disposal, etc, and standardis - ing the development of real estate trust business”, has further enhanced the application of real estate trusts. When real estate is placed into a trust, it can be held for a long period of time and the benefits can be pooled according to the demands of the principal, while still meeting the needs of commercial transactions. By adding a remark in the memo column of the real estate ownership certificate, the public is informed that the subject matter of the transaction is the trust prop - erty. This enables third parties to correctly predict the risk of the transaction and make rational transaction decisions. However, according to the format of the remarks in the relevant notice, it can only indicate to the third party that the real estate is held by the trust company as a trust property; the third party is required to check the trust document further to see whether the trust company’s right to dispose of the real estate is restricted. In practice, the trust company should also
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