[Direct answer]In the Beijing area, China has not yet levied an inheritance tax, nor have any inheritance tax laws and regulations taken effect, so there is no planning space to evade inheritance tax. In practice, the so-called family wealth inheritance planning focuses on clarifying the taxes and fees involved in the inheritance process, defining the ownership of property, and preventing inheritance disputes. According to Article 6 of the "Deed Tax Law of the People's Republic of China" (effective September 1, 2021), legal heirs who inherit land and housing ownership are exempt from deed tax; according to the "Announcement of the Ministry of Finance and the State Taxation Administration on the Taxable Income Items Applicable to Personal Income Tax for Individuals Receiving Relevant Income" (Announcement No. 74 of 2019 of the Ministry of Finance and the State Taxation Administration), legal heirs, testamentary heirs, or donees who legally acquire housing property are not subject to personal income tax. What really needs planning are the form of wills, testamentary trusts, the pace of gift-giving, and family agreements. For more details, please refer to the following link:Legal services for inheritance and family property division.

I. Problem background and typical scenarios

In family wealth inheritance consulting, "inheritance tax" is often touted as a core selling point. Typical scenarios include: business owners who are anxious to transfer real estate or equity due to concerns about the future imposition of inheritance tax; some institutions promoting insurance and trust products under the guise of "inheritance tax planning"; multi-child families who want to allocate property in advance but are worried about tax costs and the mixing of their children's post-marital assets; and family members who are unclear about the property inventory and ownership status, making it difficult to proceed with planning. It should be noted that there is no inheritance tax legislation in China, and the relevant arrangements under current laws are closer to the ownership design and tax arrangements for inheritance and donation. For those involving corporate operations and equity structure adjustments, relevant arrangements can be made in combination with the existing legal framework.Business and contract dispute resolution services for enterprisesConsider it comprehensively.

II. Key points of contention

The disputes and misunderstandings focus on three points. Firstly, tax classification: The inheritance process mainly involves deed tax and personal income tax, and in certain circumstances, it may also involve value-added tax and stamp duty, but there is no inheritance tax. Treating "planning for inheritance tax" as the core goal may easily deviate from real needs. Secondly, property ownership: If the real estate is registered under one party's name, if there is equity agency, or if the marital joint property has not been divided, these situations will undermine the foundation of inheritance arrangements, and it is necessary to first confirm property rights. Thirdly, tool selection: Wills, testamentary trusts, insurance, donations, and family agreements each have their own applicable scope and legal consequences. Once a donation is completed, it is usually difficult to revoke it, and the ownership of insurance proceeds needs to be clearly designated as a beneficiary. According to Article 113, Paragraph 4 of the Civil Code of the People's Republic of China (effective January 1, 2021), natural persons may establish testamentary trusts in accordance with the law. For real estate arrangements, reference can be made to the relevant provisions of the Civil Code of the People's Republic of China.Real estate sales and construction project services.

III. Professional analysis by Henglue Lawyers

Based on practical observations in handling inheritance and family wealth succession matters, Henglue Lawyers typically proceed in three steps. The first step is "assessment": sorting out the lists of real estate, deposits, equity, insurance, and creditor's rights and debts, and distinguishing between marital joint property and the deceased's personal property. This step determines whether the subsequent plan is feasible. The second step is "selecting tools": a self-written will or a notarized will is suitable for clarifying a single distribution intention; a testamentary trust is suitable for families with complex property structures who wish to make phased payments or long-term management; and insurance is suitable for cash flow arrangements, but the beneficiary must be clearly specified to avoid insurance money being included in the estate and causing disputes. The third step is "preventing risks": focusing on preventing defects in the form of the will, unqualified witnesses, revocation of gifts after the fact, and heirs raising objections to ownership. In the judicial practice of the Beijing area, it is not uncommon for wills to be deemed invalid due to missing formal requirements, indicating that drafting in compliance beforehand is more economical than litigation afterwards.

IV. Practical suggestions and legal basis

Practical suggestions: First, confirm ownership rights before planning, and sort out the ownership of real estate, equities, and accounts to distinguish between personal property and marital joint property; Second, draft a legally valid will to specify the location of real estate, accounts, and inheritance shares, and record the process with audio and video if necessary; Third, for complex property structures, you can establish a will trust in accordance with Article 113(4) of the Civil Code of the People's Republic of China, or appoint a will executor; Fourth, maintain necessary cash flow arrangements to avoid heirs being forced to sell property at a low price due to inheritance division; Fifth, regularly review and update the arrangements in a timely manner. The legal basis includes Article 1123 and Articles 1133 to 1145 of the Civil Code of the People's Republic of China (effective January 1, 2021); Article 6 of the Deed Tax Law of the People's Republic of China (effective September 1, 2021); and the "Announcement of the Ministry of Finance and the State Taxation Administration on the Taxable Income Items Applicable to Personal Income Tax for Individuals Obtaining Relevant Income" (Announcement No. 74 of 2019 by the Ministry of Finance and the State Taxation Administration). For cross-border property arrangements, you can refer to the relevant provisions of the Tax Administration Law of the People's Republic of China and other laws and regulations.Financial capital and cross-border legal services involving foreign affairsEvaluation.

5. Henglu Law Firm's Advice

View the so-called estate tax planning rationally: Under current law, there is no estate tax, and overstating the risk of tax burden may lead to unnecessary high-cost arrangements. What's truly valuable is to fix the ownership of property, the distribution intention, and the implementation method, so as to reduce disputes among family members and tax uncertainties. Please be cautious of promises with the selling points of "tax-inclusive" and "absolute tax avoidance". Any arrangement must comply with current effective laws and regulations and judicial rulings, and obligations cannot be evaded through false transactions, nominee ownership, and other means. If you need to make overall arrangements for the family's property structure, it is recommended that inheritance, tax, and corporate lawyers jointly develop a plan, which can be implemented through the following steps:Special services and other case servicesMake an appointment for an evaluation.

VI. Frequently Asked Questions

Q1: Can we really save on future inheritance tax by making an inheritance plan now?

At present, China has not yet imposed an inheritance tax, and there are no effective inheritance tax laws in place, so it's not possible to directly save on inheritance tax. However, reasonable inheritance arrangements can indeed reduce the actual tax and dispute costs: According to Article 6 of the "Deed Tax Law of the People's Republic of China" (effective September 1, 2021), legal heirs who inherit land and housing ownership are exempt from deed tax; according to the "Announcement No. 74 of 2019" issued by the Ministry of Finance and the State Taxation Administration, legal heirs, testamentary heirs, or donees who lawfully acquire housing property rights are not subject to personal income tax. The true value of planning lies in clear ownership and legal form. Whether to impose new taxes will be determined by official national legislation.

Q2: When making a family succession plan, what materials need to be prepared in advance?

It is recommended to prepare four types of materials. Property-related materials: real estate ownership certificates, purchase contracts, bank account and financial management lists, equity certificates, insurance policies and beneficiary designation information, creditor-debtor certificates. Identity-related materials: household registration books, marriage certificates, birth certificates, and kinship certificates. Intention-related materials: proposed distribution intentions, family internal agreements, and descriptions of heirs requiring special care. Ownership-related materials: investment certificates, agency holding agreements, and marital property agreements. The more complete the materials are, the more accurately it can be determined which properties can be disposed of and which need to be divided first, thus avoiding the failure of the planning.

Q3: How much does it cost to hire a lawyer to make a succession plan?

Inheritance planning typically falls under non-litigation legal services. The fee structure may be based on a fixed fee, a fee calculated based on the complexity of the project, or an hourly rate. The specific fee arrangement shall be subject to the provisions of the entrustment contract, and there is no unified government pricing. If litigation is involved, the litigation fees shall be paid in accordance with the "Measures for the Payment of Litigation Fees". The fee level mainly depends on the type and quantity of assets, whether a will trust needs to be established, and whether cross-border arrangements are involved. It is recommended to require the law firm to provide a service scope and fee breakdown before entrusting them, specifying whether the services include drafting, witnessing, safekeeping, or full-process follow-up, to avoid additional fees being charged later.

Q4: How long will it take to implement a complete succession plan?

The drafting and witnessing of a simple will can usually be completed within a few days after checking the ownership of the property and confirming the intention of the testator. However, if it involves equity restructuring, division of marital property, or the establishment of a testamentary trust, it often takes several weeks to months to complete due to the need to conduct due diligence, design a plan, and sign documents. For cases involving notarization, real estate registration, or cross-border arrangements, the time required will be even longer. It is recommended to first start with the basic step of inventorying and verifying the ownership of the property, then proceed according to priority, and update the plan in a timely manner when there are major changes in the property status or family structure.

Q5: If you want to take care of your children and avoid property disputes, what should you do specifically?

It is recommended to proceed in four steps: First, confirm ownership in advance and distinguish between personal property and marital joint property to avoid invalidating part of the will due to disposition of others' shares; Second, draft a legally valid and clearly defined will, specifying the location of real estate, accounts, and shares. Those who fulfill their main duty of supporting their parents can be given appropriate preferential treatment according to law, while necessary shares should be reserved for heirs who lack working capacity and have no source of income; Third, for those with complex property structures, a will trust or a designated executor may be established in accordance with Article 113, Paragraph 4 of the Civil Code of the People's Republic of China, with professionals distributing the assets according to the testator's wishes in stages; Fourth, keep audio and video recordings and properly preserve documents. When necessary, explain the situation to family members to reduce disputes after the event.

The above questions and answers are mainly based on the judicial practice in Beijing. There may be differences in the adjudication standards in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Inheritance legal services·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and publicly available adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.