Inheritance and Estate Tax in China

China stands out among major economies for having no inheritance tax, no estate tax, and no gift tax. The Ministry of Finance confirmed in 2017 that China has neither imposed inheritance tax nor issued regulations or draft regulations related to one. Despite decades of academic and legislative discussion, no such law has ever been enacted, and the current framework relies on Civil Code succession rules together with a small number of incidental transfer taxes.

This page covers how assets pass under Chinese succession law, what taxes can arise at the point of inheritance or on a later sale, and the status of the long-discussed but never-enacted estate tax proposal. For cross-border or complex family situations, consult a qualified tax professional familiar with Chinese law.

Does China have an inheritance tax or estate tax?

No. As of June 2026, the People's Republic of China imposes no inheritance tax, estate tax, or gift tax on the transfer of assets at death or by gift. This has been the consistent official position of the State Administration of Taxation (STA) and the Ministry of Finance. The STA's published tax-type inventory lists Land Appreciation Tax, Real Estate Tax, Deed Tax, Stamp Tax, and others, but no inheritance or estate tax appears in the list because none exists [chinatax.gov.cn, Tax type index].

A draft proposal circulated in 2004 (the "Interim Draft Regulations of the People's Republic of China on Inheritance Tax") and received academic attention. The 2013 State Council Notice on reforming income distribution mentioned considering an inheritance tax "at an appropriate time." In 2024, National People's Congress (NPC) deputies including Guo Shuqing submitted a motion to the NPC calling for introduction of estate and gift taxes, citing wealth-redistribution objectives. As of the date of this page, none of these proposals has been enacted into law, and no legislation is in force. Proposals should not be treated as current law.

How do assets pass at death under Chinese law?

The Civil Code of the People's Republic of China (effective 1 January 2021) replaced the 1985 Succession Law and modernised inheritance rules significantly. Book Six of the Civil Code (Articles 1119-1163) governs succession.

Statutory (intestate) succession proceeds in priority order:

• First order: spouse, children (including adopted and step-children), and parents (including adoptive parents)
• Second order: siblings, paternal grandparents, and maternal grandparents

First-order heirs inherit to the exclusion of second-order heirs. Within each order, heirs generally share equally unless the Civil Code provides otherwise, such as where an heir bore special caregiving responsibilities or where a share would leave a dependent without support.

For testate (will-based) succession, the 2021 Civil Code added recognition of printed (computer-generated) wills for the first time (Article 1136), requiring two witnesses, signatures by all parties, and dating of each page. It also retained holographic (handwritten) wills, notarised wills, audio-visual wills, and oral wills for emergency circumstances.

A significant 2021 reform was the formal introduction of an estate administrator role (Articles 1145-1149). When a person dies, the executor named in any will serves as administrator. Where there is no executor, heirs must elect an administrator by agreement. If they cannot agree, all heirs serve concurrently. Where there are no heirs or all heirs disclaim, the civil affairs authority or village committee serves as administrator. The administrator's duties include inventorying assets, notifying creditors, preventing loss or damage to the estate, clearing debts, and distributing the remainder to heirs.

Notarised wills, once considered superior to all other forms under the old law, no longer automatically prevail. Under the 2021 Civil Code, the most recently executed valid will controls, regardless of form.

What deed tax applies when heirs receive real property?

The Deed Tax Law of the People's Republic of China (adopted 11 August 2020, effective 1 September 2021) imposes deed tax on transfers of land use rights and house ownership. Under Article 6(5) of that law, acceptance of land use rights or house ownership by a statutory heir through inheritance is fully exempt from deed tax. This is a statutory exemption confirmed on the STA's official legal-database portal [fgk.chinatax.gov.cn].

For heirs who receive property under a will but are not statutory heirs (that is, they are outside the Civil Code's first- and second-order succession groups), the transfer is treated more like a gift than an inheritance, and standard deed tax rates of 3-5% (set by each province or municipality within the statutory band) apply to the property's assessed value. The distinction between statutory and non-statutory heirs therefore has real financial consequence for testamentary gifts to friends, charities, or remotely related individuals.

What individual income tax applies when an heir later sells inherited property?

No individual income tax (IIT) arises at the moment of inheriting property. However, when an heir subsequently sells the inherited real property, the gain is taxed as "income from transfer of property" under the Individual Income Tax Law. The applicable rate is a flat 20% applied to the net gain, calculated as sale price minus the original purchase cost paid by the deceased (or the assessed cost basis at the time of inheritance where original cost cannot be documented) plus allowable selling expenses [PwC China Tax Facts and Figures 2024].

Because residential property in major Chinese cities has appreciated substantially over the past two decades, this cost-basis carryover can result in a significant tax liability. One important relief applies: where an individual sells their only residential property and has held it for more than five years, an IIT exemption is available on that transaction.

Stamp duty at a nominal rate and, in some circumstances, land appreciation tax (typically exempt for residential property sold by individuals) may also arise on a sale, but IIT at 20% on net gain is the principal tax cost for most heirs who sell.

Is there a gift tax, and does IIT apply to gifts?

China has no standalone gift tax. However, IIT can apply to certain lifetime gifts of real property under a carve-out in the Ministry of Finance and STA joint circulars on property transfer taxation. When real property is gifted to a recipient who is not a close family member (spouse, parent, child, grandparent, grandchild, or sibling) and is not a legal heir or caregiver, the recipient's gain on the gift is subject to IIT at 20% of the assessed value, treated as incidental (sundry) income. Gifts between the defined close-family group pass without IIT at the gift stage; IIT arises for the donee only on a future sale, using the donor's original cost basis.

This asymmetry means that structuring a lifetime transfer to a non-relative is materially more expensive in China than a testamentary transfer to a statutory heir, because the non-relative gift triggers IIT immediately at 20% of assessed value whereas a statutory heir pays no tax at the inheritance stage and defers IIT until a sale.

What is the status of the proposed estate tax law?

China has discussed an inheritance tax since at least the 1990s. A notable internal draft (the 2004 Interim Draft Regulations) proposed a tax with an exemption threshold, progressive rates, and spousal relief, but it was never submitted to the NPC for a vote. In 2013, a State Council policy document mentioned studying the feasibility of an inheritance tax as part of income distribution reform. At the 2024 NPC "two sessions," a group of deputies including Guo Shuqing formally proposed introducing estate and gift taxes as a wealth-redistribution measure.

Despite this momentum, no bill has been tabled, no rate schedule has been officially proposed, and no implementation timeline exists. The Ministry of Finance's 2017 statement that China "has neither imposed inheritance tax, nor issued regulations or draft regulations related thereto" remains the most authoritative public position and has not been formally updated. Any future estate tax would require NPC legislation and a transitional implementation period. Until such legislation is enacted and in force, there is no inheritance tax in China, and any planning based on an anticipated law would be speculative.

Families with cross-border assets or significant Chinese-sited real property should consult the China country overview for general context, and a qualified tax professional for current advice on succession structuring.

For questions specific to your circumstances, consult a qualified tax professional with experience in Chinese succession and tax law.