Helping Legal Tax Planning with Insurance and Trust: A Predictive Analysis Based on the Introduction of Inheritance Tax in China

Abstract

With the rapid development of China's economy and the accumulation of social wealth, the introduction of an inheritance tax has become a significant issue for regulating wealth distribution and achieving social equity. This paper reviews the history of modern inheritance tax in China, examines international experiences with inheritance tax collection, and analyzes the feasibility of implementing an inheritance tax in China based on the current economic landscape and wealth distribution. It also identifies key elements that should be considered in the implementation of an inheritance tax in China, providing a reference for future system design. Furthermore, this paper discusses the legitimate use of insurance and trusts as tax-saving tools in the context of an inheritance tax. It highlights how insurance can facilitate tax-free inheritance by designating beneficiaries, while trusts offer a tax optimization strategy for wealth inheritance through independent property management. The aim is to address the collection of inheritance tax with reasonable and legal tax-saving strategies.