Update: pre-immigration and pre-residence wealth planning

The decision to change residence – or to admit a new family member into an existing structure – is rarely a single event. It is a sequence. And the sequence has a hard order: the wealth structure must be positioned before the individual's tax residence or immigration status changes, not after. For families with assets across Mainland China, Hong Kong, offshore centres and European jurisdictions, the window to act is defined by the moment of change, and that window does not reopen.

Pre-immigration and pre-residence wealth planning is the discipline of restructuring, transferring, or ring-fencing family assets before a principal or beneficiary establishes tax residence or immigration status in a new jurisdiction. Under Hong Kong law, the governing instrument is the Trustee Ordinance (Cap. 29), which – following reforms effective 1 December 2013 – abolished the rule against perpetuities for Hong Kong-law trusts and strengthened protections against foreign forced-heirship claims. Timing is the operative variable: once residence is established, most planning routes are closed or materially constrained.

This briefing covers what is driving current activity, who it affects across the Greater China and international corridor, and the immediate steps that matter.

What is driving the planning window now?

Several concurrent pressures are tightening the window simultaneously. First, the interaction between Hong Kong's territorial tax system and the foreign-sourced income exemption regime – in force from 1 January 2023 as amended – means that offshore income flowing into a structure requires economic substance to qualify for exemption. Families repositioning capital through Hong Kong ahead of a principal's immigration to a common-law jurisdiction need to model that interaction before the move, not after.

Second, the Mainland–Hong Kong reciprocal enforcement regime – operative since 29 January 2024 under the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645) – means that a Mainland judgment against a family member or entity can now be registered and enforced in Hong Kong more readily than before. Structures that were designed under the prior regime may carry exposure that was not visible at the time of inception. Pre-residence planning that ignores this enforcement corridor leaves the family's Hong Kong-held assets open to claims that travel across the boundary.

Third, European and United Kingdom-based forced-heirship regimes continue to interact unpredictably with offshore trust structures when a beneficiary takes up residence in those jurisdictions. The 2013 reforms to the Trustee Ordinance introduced a statutory firewall protecting Hong Kong-law trusts from foreign forced-heirship claims, but that protection is instrument-specific and depends on the structure being correctly governed by Hong Kong law before the triggering residency event.

Who is affected across the corridor?

The pattern our desk sees most frequently involves a founding generation with Mainland assets, a mid-generation principal relocating to Hong Kong, the United Kingdom, or a Gulf jurisdiction, and beneficial interests held through BVI or Cayman structures above a Hong Kong operating entity. The relocation of any one member of that chain can alter the tax characterisation of distributions, the enforceability of creditor claims, and the succession position across every jurisdiction in the structure.

Families relocating into Hong Kong face a distinct set of questions. Hong Kong imposes no capital gains tax and no withholding tax on dividends – advantages that attract asset consolidation through the city. But the absence of a comprehensive bilateral tax treaty network means that income routed through Hong Kong to a newly resident principal in a treaty jurisdiction can produce unexpected results. The planning must precede the immigration filing, not follow it.

For families moving a principal out of Hong Kong – or out of a Mainland holding structure – into a European or common-law system, the forced-heirship interaction is the acute risk. Several European jurisdictions impose mandatory inheritance shares that apply to worldwide assets once residence is established. A Hong Kong-law trust settled before that residence event can, subject to correct drafting and governing law, carry the statutory firewall protection. The same trust settled one day after the residence event may not.

What to do now

The immediate action is a structure audit timed to the family's immigration calendar. That audit should map every jurisdiction in which a family member currently holds assets or residence, identify the instruments governing each holding, and locate the points at which a change in one member's status transmits exposure to the others.

For families with existing offshore structures, the question is whether the governing law, trustee, and protector provisions remain fit for purpose under the post-2024 enforcement environment. For families establishing new structures ahead of a planned move, the question is sequencing: trust settlement, immigration filing, and substance arrangements must be ordered and documented in a way that can withstand regulatory and judicial scrutiny in every jurisdiction the family touches.

We regularly advise on pre-immigration planning across the Hong Kong–Mainland, Hong Kong–United Kingdom, and Hong Kong–Gulf corridors. The work involves the Trustee Ordinance, the relevant offshore trust statutes in the BVI and Cayman Islands, and the cross-border enforcement position under Cap. 645. For families where a residency event is pending, the planning timeline is short. Parties should verify the current position in their specific jurisdictions before acting.

For a structured assessment of your family's pre-immigration or pre-residence position across the relevant jurisdictions, write to us at info@lockhartyip.com.

Related practices

• Private Wealth – succession, trust, and asset-protection planning across jurisdictions
• Asset Protection – United Kingdom Exposure – managing UK forced-heirship and domicile risk for non-UK principals

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Related

• Private Wealth
• Asset Protection Principal United Kingdom Exposure Uk
• Asset Protection Principal Mainland China Exposure Mainland China 5

This publication is general information and does not constitute legal advice. For advice on your situation, contact info@lockhartyip.com.