China MOF: Original cost of assets in offshore trusts unchanged if no tax paid on contribution

The clarification narrows a key ambiguity in China's offshore trust tax regime: without a prior tax payment, contributors cannot step up cost basis to contribution-date market value, leaving a larger latent gain exposed to future tax on disposal or distribution. That matters for wealthy mainland residents who set up offshore trusts and for the trustees and advisers structuring them. Whether this pushes more contributors toward paying tax at contribution to secure a step-up, and how it interacts with reporting obligations under the same announcement, are the open questions to watch.