Kunlun Trust Development Research Weekly Information No. 171

Research Results
2014/11/04 16:56


Family Trust: Return to Original Trust Business

As the embodiment of the trust business source of "entrusted by people and financial management on behalf of others," family trusts have always been the hotspot in various media discussions and trust companies. Although domestic family trusts are still in a groping stage compared with the development of family trusts in other countries, However, many domestic companies have already done some useful attempts.

The family trust business base

Family trusts are transactional-type trusts that provide services to an individual or a family group. In general, the family trust services cover the following three aspects: First, family governance, based on family values, mediating family financial disputes, provide financial education for the next generation and help family members to cultivate financial concepts and financial independence; Second, financial management Planning and planning of all aspects of client property including tax and real estate planning, wealth transfer planning, asset protection, investment and charitable planning; third, property management, providing accounting and bookkeeping, active taxation and avoidance, reporting and cash management.

There are significant differences between family trusts and general trusts: one is that they take a long time, the existing family trusts often provide ultra-long service hours, and some family trusts inherit the color as long as the trust property exists. Is a complex target, the value of wealth preservation and appreciation is just one aspect of family trust, and more family trusts will cover diversification goals such as tax planning and property inheritance. Third, there is a large customization space and many family trusts are established with strong individuals Color and family service features, according to the client's request to increase a lot of personalized terms, with a large private custom space.

Family Trust Case I: Ping An Trust Wanquan Trust

(1) The product is a single fund trust: the raising scale is 50 million yuan, the contract period is 50 years, and the client is an entrepreneur over 40 years of age. According to the agreement, the trust principal and Ping An Trust jointly manage the assets. The principal can realize the inheritance of property by designating the successor as the beneficiary.

(2) the product is a custom, revocable trust: in the design of a single product, according to the client's wishes and special circumstances custom products. At the same time, during the existence of the product, it can also adjust the asset allocation method and operation strategy according to the client's actual conditions and risk appetite. Such trusts may be set up with other beneficiaries in the setting of beneficiaries and in the distribution of trust assets, may be changed midway, and may also limit the rights of beneficiaries. Trustee and Ping An Trust jointly manage the trust assets.

(3) Diversification of profit distribution and disclosure of product operation information to the clients: Different forms such as one-time distribution, periodic quantitative (proportional) distribution, irregular quantitative distribution, temporary distribution and conditional distribution may be selected for the distribution of trust benefits. . The trust company will regularly or irregularly report the operation of the trust property to the principal / beneficiary through formal reports or mail. Before making major decisions, the trust company will also fully consult the client's opinions so that the client can fully understand the operation information. If the principal is absent, the trust is executed under the terms of the relevant agreement or law.

(4) The application of trust funds is expected to be fixed + floating in annualized income. The funds of the trust plan mainly invest in property, infrastructure and securities and join the collective funds trust plan with an estimated annual revenue of 4% -4.5%. Fixed management fee annual rate of 1% of the trust funds, the trust rate of return of more than 4.5% above the part of the charge of 50% as a floating management fee.

Family Trust Case Two: Family Trust Fund of China Merchants Bank

(1) Non-cancellable cross-generation trusts for clients with ultra-high net worth clients: China Merchants Bank's family trust funds are mainly designed for clients whose total assets exceed 500 million yuan. The threshold of assets is 50 million yuan and the term is 30-50 years On behalf of), as an irrevocable trust. The first client to set up a family trust, Mr. Yang, is nearly 60 years old. He owns several self-owned and commercial properties, equities and financial assets in the territory. Both sons have become adults and their daughters are only 8 years old.

(2) The beneficiaries are children and the distribution of trust income is two forms: the beneficiary is three children and the income benefit of this family trust fund is divided into a certain proportion of regular and final distribution. The trusts set up are mainly cash assets. The form of trust fund properly arranges the transmission of its wealth. The family trust Mr. Yang set up this time, his children can receive regular salary, the trust period set 50 years. Encounter marriage, buy a car, business, medical and other major events, but also from the trust fund to pay money.

(3) Bank-led, trust companies participate and take the initiative: the entire family trust is dominated by China Merchants Bank, in which China Merchants Bank takes on the role of financial advisor and custodian. However, compared with Yinxin cooperation, the trust company plays a greater role. The trust company needs to sign an agreement with the principal, and will participate in the design of the trust and assume some responsibilities.

(4) Banks and trusts jointly benefit from collecting annual fees and excess management fees: annual fees are charged according to a certain percentage of the assets under custody, and the trustors will participate in the trust management before their deaths with a low proportion of fees. After the death, they are entirely managed by the banks and charges are raised. Exceeding the expected return of the principal, China Merchants Bank withdraws the excess management fee at a ratio of 20%. In addition, the trustee's trust company also charges a certain percentage. China Merchants Bank through the line assets into the trust asset package, the client can receive investment advisory fees, consulting fees can be received in the trust project, in addition to agency fees new sources of income.

(5) Professional services such as tax planning and legal advice, with relatively low fees: Tax planning includes tax planning of family cross-border investment using tools such as trusts and offshore companies, taxation of major shareholder-listed enterprises, taxation of immigrants and inheritance of wealth Planning; legal advice, including family relations in the preservation of marital assets, the establishment of family funds, such as the preservation of foreign assets. Law firms and other third-party cooperative agencies in accordance with the number of services shall prevail, the overall fee is very low. The charging mechanism of China Merchants Bank and the accounting firm is based on the funds saved before and after the tax planning as the basis and a certain percentage of commission is deducted.

Existing obstacles to family trusts

First, legal obstacles. Due to the lack of supporting system, there are many different understandings on the registration of trust property in practice in the Trust Law of our country and the procedure of registering the trust registration activities. However, the transfer of property without registration and the publicity The lack of legal effect. At the same time, the legal relationship between the trusts defined in domestic trust law is "the entrustment relation". Whether the private property of the trust property has independent independence against the public power is still not clear. When the principal involved in criminal offense, the trust property is under the current legal environment Will still be included in the scope of freezing and tracing.

Second, tax obstacles. Most of the foreign family trusts have the purpose of tax avoidance, and mainly avoid inheritance tax. Our country adopts the double-subject tax system mainly based on turnover tax and income tax, and estate tax has not been introduced yet. In view of the current trust tax system is not perfect, family trust tax planning and tax savings functions can not be reflected, even if the inheritance tax began to levy, inheritance through the inheritance of trust property inheritance tax avoidance function may not be able to achieve.

Third, privacy protection barriers. In 2014, under the pressure of the international community, Switzerland promised to hand over the details of alien accounts to other countries. This initiative made family trust clients, who are concerned about privacy, uneasy about the protection of financial privacy and information security. Because there is no relevant privacy protection system for domestic family trusts, and may also need to publicize the family trust property, there is a big hidden danger in the privacy protection of family trust businesses in China.

Fourth, asset disability barriers. Family property in the form of real estate can not be smoothly transferred to the name of the unincorporated trust plan. At the same time, since the Trust Law does not clearly stipulate the management of the equity assets, the family trust plan holding the enterprise equity may not provide a legal basis for the clear division of ownership, management rights and rights of the enterprise, especially in the event of accidental death of the principal How to determine the managers of enterprises has become an urgent problem to be solved.

Macro situation

NPC Standing Committee: Adoption of the "Budget Law" Amendment

On August 31, the 10th Session of the 12th NPC Standing Committee voted to pass the decision to amend the budget law. The revised budget law clearly stipulates the local government debt management. Some funds necessary for the construction investment in the budgets of provinces, autonomous regions and municipalities directly under the Central Government approved by the State Council may be issued through the issuance of local government bonds to borrow debts within the limits set by the State Council Way to raise.

State Council: Establishing Local Government Debt Risk Early Warning Mechanism

Premier Li Keqiang chaired a State Council executive meeting on September 2, which proposed to regulate local government debts. According to the newly revised budget law, local governments should allow local governments to borrow properly and incorporate them in budget management, and no debt funds should be used for recurrent expenditures. At the same time, it is necessary to properly handle the stock of debts, ensure follow-up financing for projects under construction, contribute to economic and social development and effectively prevent risks.

CSRC: The current stock market is moving well to lay a good foundation for the reform

On September 2, in response to the hot issues that the market is concerned about recently, a spokesman for China Securities Regulatory Commission said that the effectiveness of various reform measures in the capital market has gradually started to emerge. Meanwhile, the macroeconomy has been steadily improving, liquidity in the market has been relatively abundant, and financing costs Is expected to decline, stimulating market vitality, market confidence has increased, the stock market operation also reflects this change. The CSRC will further streamline the examination and registration of administrative examination and approval and other issues, promote the reform of the registration system for stock issuance, establish a regulatory concept centered on information disclosure, rationalize the relationship between supervision and law enforcement, enhance the efficiency of auditing and law enforcement and promote the competitiveness of securities and futures services , Building a system of law enforcement standards.

China Index Research Institute: 300 City August land transfer fees down 40%

September 2, China Index Research Institute released data show that in August, 300 cities nationwide land transfer payments totaled 144.9 billion yuan, a decrease of 11%, down 40%. In August, a total of 1,930 transactions were made in 300 cities across the country, a decrease of 23% quarter-over-quarter and 36% year-on-year. Turnover floor average price of 1136 yuan / square meter, up 7% qoq, down 3%. In August, a total of 2537 cities were launched in 300 cities across the country, a decrease of 29% quarter-over-quarter and 25% year-on-year. The total land area was 102.85 million square meters, a decrease of 16% quarter-over-quarter and 21% year-on-year.

Central Bank: net put 7 billion this week, net 4 consecutive weeks

The central bank conducted a 14-day repurchase operation of 15 billion yuan on Thursday, with a repurchase of 14 billion yuan maturing on that day and a net withdrawal of 5 billion yuan in the open market. On Tuesday, the open market was repurchased 180 billion 14 days and the net launch was 12 billion on the same day. This market (August 30-September 5) this week (August 30 - September 5) is 40 billion yuan repo is due, no central voting and reverse repurchase due, so the net release of 7 billion this week, has been for 4 consecutive weeks to achieve net release .

Industry News

Shandong Trust: Increase registered capital to 2 billion yuan

On September 2, Shandong Trust issued a notice on increasing registered capital and adjusting ownership structure. The registered capital of the company increased from 1.467 billion yuan to 2 billion yuan. The capital increase, the composition of the company's shareholders and ownership structure changes, the largest shareholder of Shandong Luxin Investment Holding Group Co., Ltd., invested 1.26 billion yuan, 63.02% stake; PetroChina Asset Management Co., Ltd. invested 500 million yuan , Holding a ratio of 25%; Shandong Hi-Tech Venture Capital Co., Ltd. invested 125 million yuan, holding a ratio of 6.25%; Shandong Gold Group Co., Ltd. invested 45.833 million yuan, 2.29% stake; Jinan Energy Investment Limited Responsible company invested 34.375 million yuan, holding a ratio of 1.72%; Weifang City invested 34.375 million yuan investment company, the shareholding ratio of 1.72%.

Ping An Trust held a "Green Dream Ping An Bank" charity activities

Recently, Ping An Trust held "2014 Ping An Trust Charity Bank" in "Qinghai Dream, Ping Anhang". As a continuation of the "100-person Aid Youth Campaign", Ping An Trust is mainly engaged in high-net-worth clients with an investment of more than 20 million yuan. The activity is carried out in the form of a family and invites clients to bring their children together to send their love and care to those poor mountainous Hope Primary Schools. In promoting communication, enhance the emotional, at the same time, cultivate children's charity. From the country's 16 high-end client families went to Qinghai together to start the journey of love and realize the commonweal dream. The activity Ping An Trust donated more than 100,000 yuan for the peace boarding school of Quanji Township, Gangcha County, Qinghai Province.

Huarong Asset Management introduced eight strategic investors

On August 28, China Huarong Asset Management Co., Ltd. announced that it will introduce 8 strategic investors, the holdings of China Life Insurance Group and the investment of 7 new strategic investors totaling 14.543 billion yuan, accounting for the total shares after the capital increase 20.98%. Huarong Assets will work with strategic investors in such business areas as asset management, investment and financing, investment banking, financial leasing, and industry-financial integration. As insurance funds increased their share of non-standard business investment, the cooperation between the four state-owned AMCs and insurance companies entered the honeymoon period. Since this year, several state-owned AMCs and their associated insurance companies have made significant connected transactions through the trust plan.

Zhongrong Trust: Sued for breach of contract of Zhejiang Sailai New Materials Co., Ltd.

Recently, Zhongrong Trust sued Zhejiang Raceday New Material Technology Co., Ltd. and its actual controller Chen Weijun and Cixi Shengtianlong Real Estate Co., Ltd., demanding the return of Sailai New Material's principal amount of RMB143 million and penalty interest. The land of Sheng Tian Long Property Mortgage Guarantee Fulfill priority liability with buildings. On January 31, 2013, Sailai Xinwu signed a working capital loan trust contract with Zhongrong Trust, with a loan amount of 143 million yuan for a term of 18 months. Major wind control was secured by the use of land with a value of 250 million and construction in progress, And the actual controller of race day new material Chen Weijun personal limited liability guarantee. In June 2014, Sai Ri Xin Mu was unable to repay the trust loan principal. Zhongrong Trust immediately started the judicial proceedings and placed the hope of disposing of the mortgage assets to make up for the losses. At present, several parties have expressed their willingness to settle themselves out of court.

SFC suspend Hua Chen future involvement of three fund subsidiaries and parent company new business

On August 29, the SFC announced the future of Hua Chen. Jin Hui Yuan Li and Wanjia three raised-fund companies were suspended for three months due to the suspension of new business by the SFC due to the compliance problems of their respective subsidiaries. The scope includes the parent company and subsidiaries. There are totally 5 financial institutions involved in the future events of Huachen, including two trust companies, namely Hunan Trust and Guoyuan Trust, as well as 10,000 Win-Win Assets Management Co., Ltd., Jinyuan Bailey Asset Management Co., Ltd. and Huachen Future Assets Management Co., Ltd. and other three fund subsidiaries. At present, several agencies have already started to discuss and solve the problem. The initial plan is to pay interest on investors and then take one year to process the claims of the project together by five financial institutions and promote the project reorganization as soon as possible.

Present: Kunlun Trust Co., Ltd. shareholders, directors, supervisors and senior management

Distribution: CNPC Asset Management Co., Ltd., Kunlun Trust Co., Ltd. departments

Editor: And Jin to feed: Lin Yin proof: Lin Yin

Tel: 010-63597713 Post Code: 100033 Address: Beijing Financial Street, No. 1 Jinyaguang Building, Room 716, Block B

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