International Trust Laws£1,220.00
"An authoritative but easy-to-use guide for the general and specialist practitioner; the legislative detail of the main international trust jurisdictions is broken down and is now within easy reach with this publication"
Martin Palmer BA (Hons) Law, ADIT
International Tax Affiliate of the Chartered Institute of Taxation
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International Trust Laws is the most reliable global source of reference on international trusts available and provides an easily accessible route to the information needed to advise clients confidently. This major work has a team of editors from XXIV Old Buildings, led by David Brownbill QC. David and his fellow editors, Jessica Hughes, Adam Cloherty, Edward Cumming and Daniel Warents, are all barristers specialising in international trust work.
The team has extensive experience of contentious, advisory and planning work across numerous jurisdictions making this an essential reference work for all business and private client advisers.
To arrange your FREE 14-day trial to the online service or to find out how a print or online subscription to International Trust Laws will benefit your day-to-day work contact our Account Management Team today.
Section ADIGESTS - Provide expert, country-by-country commentary on the elements of trust law in each jurisdiction. Each entry is prepared by contributors with experience of working in that particular territory.
- British Virgin Islands
- Cayman Islands
- Cook Islands
- Hong Kong
- Isle of Man
- New Zealand
- People's Republic of China
- Republic of Ireland
- San Marino
- South Africa
- St Vincent and the Grenadines
- Turks and Caicos Islands
- New York
Section BSPECIAL TOPICS - In-depth analysis of a range of topics relevant to lawyers concerned with trusts in an international setting.
- Forced Heirship and the Trust
- Payment by Trustees of Foreign Taxes
- Purpose Trusts
- Trading Trusts
- Asset Protection Trusts
- Disclosure of Information by Trustees
- The Future of the Trust from a Worldwide Perspective
- Trusts, Trustees and the UK Money Laundering Regime
- The Liabilities of Trusts
- Service Providers in International Financial Law
- VISTA trusts
- Models of the Trust Idea and Uses of those Models
- The Uniform Trust Code: An Introduction
CONFLICT OF LAWS - Chapters by specialist authors on jurisdiction and enforcement of judgments, applicable law and recognition (including the application and implications of the Hague Trusts Convention), capacity and other ‘rocket launching' issues plus selected reference material.
- Jurisdiction and Enforcement of Foreign Judgments
- Launching the Rocket - Capacity and the Creation of Inter Vivos Transnational Trusts
- International Recognition of Trusts
- Appendix: Explanatory Report by Von Overbeck
- Appendix: Explanatory Report on the Brussels Convention by Schlosser
- Appendix: Council Regulation on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters
STATUTES (and other reference material) - Extensive full text trust legislation from each of the jurisdictions.
"An authoritative but easy -to-use guide for the general and specialist practitioner ; the legislative detail of the main international trust jurisdictions is broken down and is now within easy reach with this publication"
Martin Palmer BA (Hons) Law, ADIT
International Tax Affiliate of the Chartered Institute of Taxation
"Yes, this is the most reliable global source of reference on international trusts ... International Trust Law is a world leader"An appreciation by Phillip Taylor MBE and Elizabeth Taylor of Richmond Green Chambers
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Consultant EditorDavid Brownbill QC
General EditorsJessica Hughes, Adam Cloherty, Edward Cumming and Daniel Warents all at XXIV Old Buildings, Lincoln's Inn
ContributorsProf Dr Jur Makoto Arai
Dr iur Klaus Biedermann
Dr Alexandra Braun
Professor W E Butler
Dr Trevor Carmichael
Samuel E Commissiong
Professor David M English
Sir Henry de B Forde QC
Monica Galea John
Robert Ham QC
Professor Jonathan Harris
Justice David Hayton
Jonathan Hilliard QC
Professor Alastair Hudson
Khairul Azhar Khairuddin
Kenneth W Kingma
Isaac N Legair
Sylvia Nicole Liverpool
Lucinda E Main
Jay H McDowell
Christopher J McKenzie
Richard F G Pease
Marilyn Piccini Roy
Michael Tennet QC
Professor Geraint Thomas QC
Muhammad R C Uteem
Professor Donovan Waters QC
David W Wilson
Judge Basil Wunsh
Editorial team contact detailsEditors, International Trust Laws
XXIV Old Buildings
DX 306 LDE
T: +44 (0)20 7691 2424
F: +44 (0)870 460 2178
The People’s Republic of China
Digest of Trust Law
The legal system of the People’s Republic of China is drawn from socialist and civil law jurisdictions, where there is no indigenous concept identical to the common law trust. The trust institution was introduced into China by legislation (the Trusts Law of the People’s Republic of China) promulgated on 28 April 2001. The Trusts Law came into effect on 1 October of the same year. Article 3 of the Trusts Law provides that this Law is applicable to trust activities carried out by settlors, trustees and beneficiaries in China. Furthermore, art 17 of the Law on Choice of Law for Foreign-related Civil Relationships (2010) provides that the parties of a trust may choose the applicable law by agreement; if no choice of law is made, the law of the location of the trust property or the place of establishment of the trust shall apply. The notion of ‘foreign-related’ civil relationships has been defined in judicial interpretation as civil relationships whereby:
– one or both of the parties is a natural or legal foreign person, a stateless person;
– the subject matter of the relationship is located overseas; or
– the establishment, variation or termination of the legal relationship takes place overseas.
Article 3 of the Trusts Law may conflict with the subsequently enacted Law on Choice of Law, where the parties have not chosen any applicable law, and the trust is established overseas or the trust property is located overseas, but trust activities are carried out in China. This is because the former suggests that the Chinese Trusts Law applies, whereas the latter suggests that the relevant foreign law applies. In such a situation, according to art 83 of the Legislative Law of the PRC, the more recent legal provision will apply. Since the enactment of the Trusts Law, further legislation and administrative regulation have been passed to provide for the use of the trust in numerous financial arrangements in China, such as securities investment funds, collective capital trusts, occupational pension funds (‘enterprise annuities’) and asset securitisation. The laws and regulations pertaining to these trusts augment the basic requirements and regulatory framework set forth in the Trusts Law.
1. Formal and substantial requirements in establishing a trust
Chinese trusts must be established by written documents, which include ‘trust contracts’, wills or other documents authorised by laws or administrative regulations. Where a trust is established by will, the Succession Law of the People’s Republic of China shall apply. Under the Succession Law, a will can take the following form:
– a notarial will, when it is made by a testator through a notary agent;
– a will written by the testator, in his own handwriting and signed by him, specifying the date the will was executed;
– a will written by someone on behalf of the testator – such wills must be witnessed by two or more witnesses, one of whom writes the will, dates it and signs it along with the other witness(es) and the testator;
– a will made in the form of a sound-recording – such wills must be witnessed by two or more witnesses;
– an oral will made in emergency situations – such wills must be witnessed by two or more witnesses, and will be invalidated if the emergency subsides and the testator is able to make a will in writing or by a sound-recording.
A will can be revoked or amended during the lifetime of the testator. The last unrevoked will of the testator prevails over other earlier wills, except that
a notarial will may not be revoked or altered by a will written by a testator or by someone on behalf of the testator, a will in the form of a sound-recording or a nuncupative will. If a will or part of it is void, the rules on statutory succession will apply to the extent of voidness. Only persons with full civil capacity, who are not the successors to the will, and whose interests are not related to those of the successors, can act as witnesses to the will. All wills must reserve a necessary portion for a successor who cannot work and does not have a source of income.
It appears from art 10 of the Trusts Law that a trust only needs to be registered if the trust property is of the type that normally requires registration. The article provides that where registration is required by laws or administrative regulations with respect to the trust property, there must be trust registration. The trust has no legal effect until it is registered, but retroactive registration is permitted. The Law, however, does not also state how long registration can be postponed, with which authority it should be registered or what steps are involved in trust registration. An attempt to establish a voluntary system of trust registration was made in 2006 by the Shanghai Pudong New Area Bureau. The Bureau put in place a Shanghai Trust Registration Centre, which called for voluntary registration of trusts, with a view to building a public registry of trusts. The take-up rate was, however, very low.
A trust is effective upon the entry into a trust contract by the settlor and the trustee, or – in the case of a will – upon the acceptance of the trustee. The trust document should contain information about the purpose of the trust, the names and domiciles of the settlor and trustee, the beneficiary or class of beneficiaries, the scope, type, and state of the trust property and the method of distribution of trust assets to beneficiaries.
A settlor must be a natural or legal person or other legally established organisation with full civil capacity. According to the PRC General Principles of Civil Law, full civil capacity is enjoyed by a natural person at the age of 18 or above, and a natural person between the ages of 16 and 18 and whose main source of income is his own labour. A legal person is defined in art 37 of the General Principles of Civil Law as an organisation that:
(a) is established in accordance with law;
(b) possesses the necessary funds;
(c) has its own name, organisation and premises; and
(d) can independently bear civil liability.
This includes (profit-making) enterprises, economic associations established pursuant to art 51 of the General Principles, as well as (non profit-making) official organs, institutions and social organisations. A legally established organisation with full civil capacity is one that falls short of a legal person owing to the absence of an independent fund, name, organisation and premises.
A trustee must be a natural or legal person with full civil capacity. Unlike the case of settlors, a trustee cannot be a legally established organisation with full civil capacity (but without legal personhood). There can be joint trustees, and the Law does not cap the number of trustees.
A beneficiary may be (but need not be) a natural person or a legal person or other legally established organisation. The settlor may be a beneficiary or the sole beneficiary of the same trust; the trustee may be a beneficiary but must not be the sole beneficiary (apparently even if there is a co-trustee).
A trust will be void if:
– the beneficiary (or class of beneficiaries) is uncertain;
– the trust property cannot be determined, is not lawfully owned by the settlor or is prohibited from circulation by laws and administrative regulations;
– the purpose of the trust is illegal or harms the public interest; or
– the trust purpose is to institute a legal action or recover a debt.
The trust will be voidable, meaning that it may be nullified, if by establishing the trust the settlor prejudices the interests of his creditors. The creditors may petition the court to nullify the trust, but must do so within one year from the time they became aware or ought to have become aware of the ground for nullification; in any event, trust benefits already obtained by bona fide beneficiaries will not be affected by the nullification order.
It is noteworthy that the Trusts Law does not expressly require the settlor to transfer his ownership to the trustee in order to establish a trust. Article 2 of the Trusts Law only defines the trust as a situation whereby: ‘the settlor … entrusts the rights in his property to the trustee and the trustee manages or disposes of such property in his own name.’ In Chinese law, ‘entrustment’ is typically used for creating an agency relationship (as well as a mandate), which does not require any transfer of property to the agent. Two other provisions of the Trusts Law corroborate with the view that a transfer of the trust property is not necessary. Article 30, which permits the trustee to delegate his duty in exceptional circumstances, uses the word ‘entrusts’ to refer to the trustee’s entrustment of agents. Article 15 of the Trusts Law also stipulates that the trust property must be kept separate from the settlor’s property. This provision would be superfluous if settlors were required to transfer ownership to the trustee in order to establish trusts. In light of the above analysis, the Chinese Trusts Law permits two types of trust: those where the settlor transfers his rights (which may be ownership rights) over the trust assets to the trustee; and those where the settlor merely enters into a contract of ‘entrustment’ with the trustee. In practice, though, almost all trusts in China involve shares or capital transferred to the trustee to be held on trust.
The Chinese Trusts Law is also notable for its absence of provisions on perpetuity rules, taxation of trusts, conflict of laws (except for a brief provision (art 3) stating that the Chinese Trusts Law applies to trust activities carried out in China), estrictions on the location of trust administration or on the residence of settlors, trustees and beneficiaries. Neither is there any provision in the Trusts Law dealing with the permissible scope of a trustee exemption clause. Where a trust is established by a trust contract, the Contract Law, and hence art 53 in that Law governing exemption clauses, is applicable. The article renders void any exemption of liability for property losses arising from deliberate wrongdoing or gross negligence, and liability for physical injury.
£1,220.00 main work + p&p (there is an additional cost for non-UK mainland p&p)
5 updates per year (£257.00 approx. each - invoiced on publication). You will continue to receive updates until you countermand this.
The following sections have been amended:
● Section B – Special Topics, Chapter 2 – Payment by Trustees of Foreign Taxes and Chapter 19 – Shams, Revocable Trusts and Retention of Control.
● Section D – Statutes, Appendix 1 – England.
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