The question of to what extent, if at all, trusts are taxable in Hong Kong is regularly raised and debated in both academic and professional circles. In light of the increasing interest in Hong Kong as a jurisdiction in which to establish trusts and develop wealth and estate planning solutions, there is a greater need than ever for certainty on how exactly a trust is taxed in Hong Kong and its domestic and international implications both for trustees and beneficiaries. This article aims to provide an overview of the law in Hong Kong and evaluate different analytical approaches to the question, before proposing a clear, elegant solution consistent with the statutory schema of the Inland Revenue Ordinance and common law decided authorities.