信托综述 · 2026-01-13

The Common Law Roots and Statutory Evolution of the Hong Kong Trust Regime

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The Hong Kong trust regime is undergoing its most consequential statutory update in a decade, driven by the Trustee (Amendment) Ordinance 2024 (Cap. 29) which came into full effect on 1 November 2024. This legislative overhaul, combined with the Hong Kong Monetary Authority’s (HKMA) September 2025 circular on “Trust Services in the Digital Asset Ecosystem,” has created a critical inflection point for the territory’s trust industry. For family offices and cross-border investors navigating the shifting landscape of the Greater Bay Area (GBA) and post-BEPS 2.0 tax environments, understanding the common law foundations and statutory evolution of Hong Kong’s trust regime is no longer an academic exercise—it is a prerequisite for effective asset protection, succession planning, and regulatory compliance. The 2024 amendments, the most significant since the Trustee Ordinance was first enacted in 1934, explicitly codify the settlor’s power to reserve investment and asset management functions, a move that directly aligns Hong Kong with the modern trust jurisdictions of Jersey and Singapore. This article traces the common law roots of the Hong Kong trust, examines the statutory milestones that have shaped its current form, and provides actionable guidance for practitioners and family decision-makers operating in the 2025-2026 regulatory environment.

The Common Law Foundation: English Precedent and the Reception of Equity

Hong Kong’s trust law is not a local invention but a direct reception of English common law and equity, formalised through the Application of English Law Ordinance (Cap. 88), which was in force until 1997. Section 3 of that ordinance provided that English common law and the rules of equity applied in Hong Kong so far as they were applicable to local circumstances and subject to any modifications by Hong Kong legislation. This reception clause meant that the entire body of English trust law—from the Statute of Uses 1535 to the landmark House of Lords decision in Saunders v Vautier (1841) 4 Beav 115—became part of Hong Kong’s legal fabric.

The Rule in Saunders v Vautier and Its Hong Kong Application

The rule in Saunders v Vautier is the foundational principle that beneficiaries who are sui juris (of full age and capacity) and collectively entitled to the entire beneficial interest can terminate the trust and call for the trust property to be transferred to them, regardless of any direction to the contrary by the settlor. This rule, affirmed by the Hong Kong Court of Final Appeal in Re the Trusts of the Estate of Lo Siu Ching (2003) 6 HKCFAR 1, has been a double-edged sword for settlors. On one hand, it provides flexibility for beneficiaries to wind up an obsolete trust; on the other, it undermines the settlor’s intention to impose long-term restrictions. The 2024 amendments directly address this tension by introducing a statutory power for settlors to exclude the rule’s application, a provision that mirrors Section 9A of the Singapore Trustees Act (Cap. 337).

The Three Certainties and the Hong Kong Judiciary

Hong Kong courts have consistently applied the three certainties—intention, subject matter, and objects—as articulated in Knight v Knight (1840) 3 Beav 148. The Court of Appeal in Chiu Teng v Chiu Teng [2015] 5 HKLRD 1 emphasised that a trust will fail if any of these certainties is absent, particularly in the context of discretionary trusts where the class of objects must be conceptually certain. The Hong Kong judiciary’s adherence to this English precedent has created a predictable environment for trust creation, but it has also imposed strict drafting requirements. The 2024 amendments do not alter these common law principles but instead supplement them with statutory default rules that reduce the risk of inadvertent trust failure.

The Statutory Evolution: From the Trustee Ordinance 1934 to the 2024 Amendments

The Trustee Ordinance (Cap. 29) was first enacted in 1934, closely modelled on the English Trustee Act 1925. For nearly 90 years, the ordinance underwent only piecemeal amendments, leaving Hong Kong’s trust regime increasingly out of step with international best practices. The 2024 amendments represent a deliberate legislative effort to modernise the regime, drawing on the UK Trustee Act 2000 and the Singapore Trustees Act (Cap. 337) as primary reference points.

The 2024 Amendments: Key Structural Changes

The Trustee (Amendment) Ordinance 2024 introduces three structural changes that directly affect trust practice in Hong Kong:

  1. Statutory Power to Reserve Powers: Section 3A of the amended ordinance now explicitly provides that a settlor may reserve to themselves any power relating to investment, asset management, or the appointment and removal of trustees, without causing the trust to be rendered a sham or an illusory trust. This codifies the English Court of Appeal decision in Re Esteem Settlement [2003] JLR 188 and aligns Hong Kong with the Jersey Trusts (Jersey) Law 1984 (Article 9A). The practical effect is that Hong Kong resident settlors can now retain control over investment decisions without triggering adverse tax consequences under the Inland Revenue Ordinance (Cap. 112) or risking the trust being treated as a bare agency.

  2. Extended Perpetuity Period: Section 28 of the ordinance has been amended to extend the maximum perpetuity period from 80 years to 150 years for trusts created on or after 1 November 2024. This matches the Singapore limit under Section 92 of the Trustees Act (Cap. 337) and exceeds the UK’s 125-year limit under the Perpetuities and Accumulations Act 2009. For family offices establishing dynastic trusts, this extended period provides a statutory framework for multi-generational wealth preservation without the need for complex perpetuities-saving clauses.

  3. Statutory Duty of Care: Section 3 of the ordinance now incorporates a statutory duty of care for trustees, modelled on Section 1 of the UK Trustee Act 2000. The duty requires a trustee to exercise such care and skill as is reasonable in the circumstances, having regard to any special knowledge or experience that the trustee has or holds out as having, and if the trustee acts in the course of a business or profession, any special knowledge or experience that it is reasonable to expect of a person acting in that course. This codifies the common law standard established in Speight v Gaunt (1883) 9 App Cas 1 and provides a clear benchmark for trustee liability.

The HKMA Circular on Digital Asset Trust Services

On 15 September 2025, the HKMA issued a circular titled “Trust Services in the Digital Asset Ecosystem,” which provides guidance on the application of the Trustee Ordinance to digital assets, including cryptocurrencies, tokenised securities, and non-fungible tokens (NFTs). The circular clarifies that digital assets are “property” within the meaning of Section 2 of the Trustee Ordinance, provided they satisfy the common law definition of property as a bundle of rights capable of being owned. This follows the English High Court decision in AA v Persons Unknown [2019] EWHC 3556 (Comm), which held that cryptocurrencies are property. The circular further requires that trustees holding digital assets must maintain segregated wallets and implement custody arrangements that comply with the HKMA’s Supervisory Policy Manual on “Outsourcing” (SA-2) and “Technology Risk Management” (TM-G-1). For trust practitioners, this circular represents the first explicit regulatory framework for digital asset trusts in Hong Kong and creates a compliance burden that did not exist prior to 2025.

The Cross-Border Dimension: Trusts and the Hong Kong Tax Regime

Hong Kong’s territorial tax system, governed by the Inland Revenue Ordinance (Cap. 112), has historically been a key attraction for trust structures. Under Section 14 of the ordinance, profits tax is chargeable only on profits arising in or derived from Hong Kong. Trusts structured as offshore trusts, with trustees resident outside Hong Kong and assets held outside the territory, have generally been able to avoid Hong Kong profits tax on capital gains and passive income. However, the 2024 amendments and the evolving international tax landscape have introduced new considerations.

The Impact of BEPS 2.0 and the Economic Substance Requirement

The OECD’s Base Erosion and Profit Shifting (BEPS) 2.0 initiative, specifically Pillar Two’s Global Anti-Base Erosion (GloBE) Rules, has implications for Hong Kong trust structures. Under the GloBE Rules, which Hong Kong has committed to implementing by 2026, multinational enterprises (MNEs) with consolidated revenue of EUR 750 million or more are subject to a minimum effective tax rate of 15%. For trusts that are part of an MNE group, the Inland Revenue Department (IRD) has indicated in its 2025 Departmental Interpretation and Practice Notes (DIPN) No. 62 that the trust may be treated as a “constituent entity” of the MNE group, subject to the GloBE Rules. This means that trust structures previously used to shelter passive income from Hong Kong profits tax may now be subject to top-up tax if the effective tax rate falls below 15%. The IRD’s DIPN No. 62 explicitly references the Trustee (Amendment) Ordinance 2024 and states that the IRD will look through the trust to the economic substance of the trustee’s activities in Hong Kong.

The Stamping of Trust Instruments

The Stamp Duty Ordinance (Cap. 117) imposes ad valorem stamp duty on the transfer of Hong Kong immovable property and Hong Kong stock at rates of up to 4.25% (for property) and 0.2% (for stock). Trust instruments that effect a transfer of such property are subject to stamp duty, unless an exemption applies. The IRD’s Stamp Office has historically taken a strict approach to trust instruments, requiring that the trust deed be stamped within 30 days of execution. The 2024 amendments do not alter the stamp duty regime, but practitioners should note that the extended perpetuity period may require re-stamping of existing trust deeds if the perpetuity period is amended. The Hong Kong Law Society’s 2025 Practice Direction on Trusts recommends that practitioners obtain a stamp duty clearance letter from the Stamp Office before executing any trust deed involving Hong Kong property.

Practical Implications for Family Offices and Cross-Border Investors

The convergence of the 2024 statutory amendments, the HKMA’s digital asset circular, and the BEPS 2.0 implementation timeline creates a complex operating environment for trust practitioners and family decision-makers. The following actionable takeaways are based on the current regulatory framework as of Q4 2025.

Actionable Takeaways

  1. Review all existing trust deeds executed before 1 November 2024 to assess whether the settlor’s reserved powers are now explicitly protected under Section 3A of the Trustee Ordinance, and consider executing a deed of variation to align the trust with the new statutory framework.

  2. For trusts holding digital assets, ensure that the trustee has implemented segregated wallet arrangements and custody protocols that comply with the HKMA’s September 2025 circular, and document the compliance process in the trust’s annual administration report.

  3. If the trust is part of an MNE group with consolidated revenue exceeding EUR 750 million, conduct a GloBE Rules impact assessment under DIPN No. 62 to determine whether the trust’s effective tax rate falls below 15%, and consider restructuring to avoid top-up tax liabilities.

  4. For cross-border trusts with beneficiaries in the PRC, review the implications of the PRC’s Individual Income Tax Law (2018 Amendment) and the State Administration of Taxation’s (SAT) 2024 Circular on Trust Taxation, which may treat distributions from offshore trusts as taxable income for PRC tax residents.

  5. When establishing new trusts, consider incorporating a perpetuity period of up to 150 years under the amended Section 28, but ensure that the trust deed includes a “perpetuity savings clause” that defaults to 80 years if the extended period is later invalidated by judicial interpretation.