the slide at 7:02. There’s no such thing as 6億万円. Doesn’t that just mean 6億円, or about $4 million US, which is a lot of money, but much less than a billion dollars. Or did you mean billionaire in yen? I suppose a house in a nice part of Tokyo would cost that. Do you know if Japan asses assets such as homes at book or purchased value, or at market value? Love your videos, by the way. Really appreciate you sharing this information
Damn, someone noticed that typo 🤣 Yes, it should be just 6億, ie 600 million yen or around $4m USD. I'm not completely sure how real estate is valued for inheritance tax purposes. I believe it might be the land tax value although the tax office can dispute that value if they think it is out of whack with market value.
Do you think you could gift your children money before you die? In the UK currently we have this 7 year rule for example. Say for instance when you're old and near the end, could you just bank transfer the money to your kids?
Anyone in Japan can receive up to 1.1m yen a year without paying gift tax. You could give someone up to that mush for many years to avoid this. There is also an early inheritance option but that would ultimately be subject to inheritance tax.
@@RetireJapan_OG Say you held property in the UK and lived in Japan. If you were to transfer that property in name to your child, that presumably comes under that gift tax? So you'd really not want to be resident when doing such things...
My understanding is that Japan basically ignores trusts or other schemes and treats the money as passing to the individual. This can result in paying more tax, as it could be subject to gift tax. Best to get professional advice.
Just owning an akiya does not mean you are a tax resident. Plenty of non-residents own real estate in Japan (there are no restrictions on ownership, unlike in some countries). If you live here as described in the video you may be liable for Japanese inheritance tax.
Thank you, always for sharing your knowledge with us common folk. I do have a question. When my parents pass away in Canada, would Japan really be notified that I’ve received inheritance? If it remained in a Canadian bank account and brought over in small increments or only used while in Canada, would Japan still have a right to it?
My pleasure! Your question is basically 'will I get caught if I evade taxes in Japan?' Possibly. There are now tax information sharing treaties between most OECD countries, and Japan can access your Canadian bank info etc. I imagine it will get easier as AI comes into play. But assuming it is a normal inheritance (if it is huge I recommend paying for professional advice) why take that risk? Your tax bill will be fairly reasonable.
Thank you for the informative video. In the last table (Inheritance tax rates), there are typos in the first column. For all rows above 1億円, it's written as 〇億万円 instead of 〇億円. The numeral values are correct, but need to remove the extra 万 from the kanji values.
Thanks for you video. I am a Canadian living in Japan with my family. In Canada, there is a capital gain tax when someone dies. Was wondering if that would be a better option. You know, to die in Canada instead of Japan 😂
Great video! Can you do one about tax rates on retirement income for foreigners in Japan. How much will my investment income be taxed and my 401k? You have a very unique content niche - no one else is talking about this yet which is rare on RUclips!
If you are liable to pay Japanese taxes, capital gains tax is 20.315% (same for dividends). 401k accounts are not tax-free in Japan but may be classed as retirement bonus and get a tax break (I'm not sure).
I don’t have an issue with the concept of inheritance tax I have an issue with how Japan deals with it. In the U.S. inheritance tax was causing major issues where large family farms were forced to sell because the threshold was too low so they changed it in the 80s or 90s. In my opinion Japan threshold is too low. In addition, if the inheritance is from an expats overseas family, then that country should have the right to tax inheritance and not Japan. The inheritance was earned and taxed in that country and Japan has ZERO contribution to it and should have ZERO taxing ability on it.
@@RetireJapan_OG I’m sorry but this is a cop out answer. The person that passed away made the decision to live in their home country and abide by those tax regulations. They made the decision to give their estate to whomever they want regardless of where that person lives and now their estate goes to a government they had no interaction with, received no benefits from and now their estate goes to a country they likely never knew would tax their estate like this. The person receiving the inheritance may not even be aware they are receiving an inheritance or how significant their inheritance might be nor the implications of that inheritance to decide how to manage it. The death could have occurred unexpectedly when you may have had plans to leave Japan, but yet you’re now subject to it.
@@RetireJapan_OG There's also the 10 year rule where even if you and all of your heirs left Japan with all of their assets you are still subject to Japanese inheritance tax for worldwide assets if the person that died or the person receiving the asset was living in Japan within the 10 years immediately prior to death. People also need to think ahead and not just rely on spousal exemption to lower your Japanese inheritance tax. The 1st death (death of one spouse) might not be too bad but the 2nd death (when the surviving spouse dies) the tax bill might be much higher. It is also possible to be in the 66% inheritance tax bracket by virtue of leaving assets to someone other than someone closely related to the deceased like your spouse, children because of the 20% increase in tax of their share of assets inherited. Suppose you only had a sibling to leave your assets. While that person is a statutory heir thus has Iryubun (a portion of assets that can be claimed by that heir even if the will contradicts it), a sibling is not close enough in terms of avoiding the 20% increase in inheritance tax. About the choice people have to live in Japan, sometimes it isn't that simple when you have elderly parent(s) who already live in Japan. Even if you were able to move them out of Japan, it'll take 10 years before the Japanese inheritance tax obligation is gone. Aside, even for those people with a practical choice in moving to Japan or not, does that not substantially reduce the attractiveness of moving to Japan especially for those with enough wealth to likely be able to pay for their own medical expense, elderly care, inheritance tax and other tax without relying on government subsidy? The system with relatively low exemption ends up attracting the wrong group of people from a financial standpoint. Some might be very wealthy and just give away most of their assets before they move to Japan to their children living outside of Japan avoiding Japanese gift and inheritance tax. They may also delay moving to Japan until close to the need of elderly care which Japan has public insurance coverage. So you end up having people who couldn't afford their own care, won't pay any inheritance tax, but benefit from low cost of health insurance and elderly care benefits. Japan continues to have a population decrease. People leave Japan for better work opportunity, start building family outside of Japan, and don't bother considering returning to Japan until they are much older. So yes, often, it is a choice, but does that truly benefit Japan by keeping this low inheritance tax exemption when many countries are increasing the exemption and even getting rid of inheritance tax all together?
You are the best at explaining this complicated stuff. Thank you, Ben.
Ha, ha, thanks! This is just a simple overview of the topic. Anyone with an inheritance may need to consult an accountant and/or the tax office...
the slide at 7:02. There’s no such thing as 6億万円. Doesn’t that just mean 6億円, or about $4 million US, which is a lot of money, but much less than a billion dollars. Or did you mean billionaire in yen? I suppose a house in a nice part of Tokyo would cost that. Do you know if Japan asses assets such as homes at book or purchased value, or at market value? Love your videos, by the way. Really appreciate you sharing this information
Damn, someone noticed that typo 🤣
Yes, it should be just 6億, ie 600 million yen or around $4m USD.
I'm not completely sure how real estate is valued for inheritance tax purposes. I believe it might be the land tax value although the tax office can dispute that value if they think it is out of whack with market value.
@@RetireJapan_OG Thoughts so! Your videos are great, even with little typos!
How does Japan. tax US retirees with a spouse visa that lives there full-time? Their income comes from US investments and SS.
How abóut spouse or çhild àñd permanent recidences tax
Sorry, not sure what you mean there.
If the inheritance tax is less that 36Million JPY, you dont need to even report or inform the amount of inheritance right?
Correct. Well, if the inheritance is under the tax-free limit, which could be more than 36m if there are more legal heirs...
@@RetireJapan_OG thanks
How about property/houses inherited ? (Apart from the general estate) Do capital gains taxes need to be paid ?
Do you think you could gift your children money before you die? In the UK currently we have this 7 year rule for example. Say for instance when you're old and near the end, could you just bank transfer the money to your kids?
Anyone in Japan can receive up to 1.1m yen a year without paying gift tax.
You could give someone up to that mush for many years to avoid this.
There is also an early inheritance option but that would ultimately be subject to inheritance tax.
@@RetireJapan_OG Say you held property in the UK and lived in Japan. If you were to transfer that property in name to your child, that presumably comes under that gift tax? So you'd really not want to be resident when doing such things...
Yeah, gift tax is much more punitive than inheritance tax.
Does Japan offer "trusts" like the US to avoid the taxes?
Hell, no 😂
what if it's a trust setup in the other country though? with the beneficiary being the person in Japan
My understanding is that Japan basically ignores trusts or other schemes and treats the money as passing to the individual. This can result in paying more tax, as it could be subject to gift tax.
Best to get professional advice.
@@andyr00d Or better yet, an organization that an individual just so happens to be in charge of. But yes, expert lawyer advice is always best.
So if you have an akiya, you may have to pay inheritance.
Just owning an akiya does not mean you are a tax resident. Plenty of non-residents own real estate in Japan (there are no restrictions on ownership, unlike in some countries).
If you live here as described in the video you may be liable for Japanese inheritance tax.
Thank you, always for sharing your knowledge with us common folk.
I do have a question. When my parents pass away in Canada, would Japan really be notified that I’ve received inheritance?
If it remained in a Canadian bank account and brought over in small increments or only used while in Canada, would Japan still have a right to it?
My pleasure!
Your question is basically 'will I get caught if I evade taxes in Japan?'
Possibly. There are now tax information sharing treaties between most OECD countries, and Japan can access your Canadian bank info etc. I imagine it will get easier as AI comes into play.
But assuming it is a normal inheritance (if it is huge I recommend paying for professional advice) why take that risk? Your tax bill will be fairly reasonable.
Great video ! A very clear and helpful explanation of a very complicated topic.
Glad it was helpful!
So the moral of the story/tax is that if you come from a well-off family, you should knock off your parents before applying for permanent residency.
That... is one interpretation 😬
Thank you for the informative video.
In the last table (Inheritance tax rates), there are typos in the first column. For all rows above 1億円, it's written as 〇億万円 instead of 〇億円. The numeral values are correct, but need to remove the extra 万 from the kanji values.
Yikes, that is a pretty serious typo. Thanks!
Thanks for you video.
I am a Canadian living in Japan with my family.
In Canada, there is a capital gain tax when someone dies. Was wondering if that would be a better option. You know, to die in Canada instead of Japan 😂
That is going to be a very personal decision, and probably not one that is going to be based solely on financial factors.
Great video! Can you do one about tax rates on retirement income for foreigners in Japan. How much will my investment income be taxed and my 401k? You have a very unique content niche - no one else is talking about this yet which is rare on RUclips!
If you are liable to pay Japanese taxes, capital gains tax is 20.315% (same for dividends). 401k accounts are not tax-free in Japan but may be classed as retirement bonus and get a tax break (I'm not sure).
Reform have stated they would abolish inheritance tax for estates under £2M, which I think is acceptable.
Sorry, what reforms are you referring to?
@@ww8535 Nigel Farage
It's a fringe UK political party with no chance of getting elected.
Quách Quang Khánh nộp thuế thừa kế rồi. Bây giờ chả có gì lo nghĩ, vi vu sống chậm tận hưởng cuộc sống. Vậy thôi
Thank you. I agree that for most people it doesn't make sense to worry about inheritance tax 😀
I don’t have an issue with the concept of inheritance tax I have an issue with how Japan deals with it. In the U.S. inheritance tax was causing major issues where large family farms were forced to sell because the threshold was too low so they changed it in the 80s or 90s. In my opinion Japan threshold is too low. In addition, if the inheritance is from an expats overseas family, then that country should have the right to tax inheritance and not Japan. The inheritance was earned and taxed in that country and Japan has ZERO contribution to it and should have ZERO taxing ability on it.
If the person receiving it lives in Japan they are subject to Japanese tax law.
Easy to avoid by not living in Japan 😉
@@RetireJapan_OG I’m sorry but this is a cop out answer.
The person that passed away made the decision to live in their home country and abide by those tax regulations. They made the decision to give their estate to whomever they want regardless of where that person lives and now their estate goes to a government they had no interaction with, received no benefits from and now their estate goes to a country they likely never knew would tax their estate like this.
The person receiving the inheritance may not even be aware they are receiving an inheritance or how significant their inheritance might be nor the implications of that inheritance to decide how to manage it. The death could have occurred unexpectedly when you may have had plans to leave Japan, but yet you’re now subject to it.
None of that matters because you are subject to Japanese law if you choose to live here.
@@RetireJapan_OG Again a cop out answer to the person that died
@@RetireJapan_OG There's also the 10 year rule where even if you and all of your heirs left Japan with all of their assets you are still subject to Japanese inheritance tax for worldwide assets if the person that died or the person receiving the asset was living in Japan within the 10 years immediately prior to death. People also need to think ahead and not just rely on spousal exemption to lower your Japanese inheritance tax. The 1st death (death of one spouse) might not be too bad but the 2nd death (when the surviving spouse dies) the tax bill might be much higher. It is also possible to be in the 66% inheritance tax bracket by virtue of leaving assets to someone other than someone closely related to the deceased like your spouse, children because of the 20% increase in tax of their share of assets inherited. Suppose you only had a sibling to leave your assets. While that person is a statutory heir thus has Iryubun (a portion of assets that can be claimed by that heir even if the will contradicts it), a sibling is not close enough in terms of avoiding the 20% increase in inheritance tax. About the choice people have to live in Japan, sometimes it isn't that simple when you have elderly parent(s) who already live in Japan. Even if you were able to move them out of Japan, it'll take 10 years before the Japanese inheritance tax obligation is gone. Aside, even for those people with a practical choice in moving to Japan or not, does that not substantially reduce the attractiveness of moving to Japan especially for those with enough wealth to likely be able to pay for their own medical expense, elderly care, inheritance tax and other tax without relying on government subsidy? The system with relatively low exemption ends up attracting the wrong group of people from a financial standpoint. Some might be very wealthy and just give away most of their assets before they move to Japan to their children living outside of Japan avoiding Japanese gift and inheritance tax. They may also delay moving to Japan until close to the need of elderly care which Japan has public insurance coverage. So you end up having people who couldn't afford their own care, won't pay any inheritance tax, but benefit from low cost of health insurance and elderly care benefits. Japan continues to have a population decrease. People leave Japan for better work opportunity, start building family outside of Japan, and don't bother considering returning to Japan until they are much older. So yes, often, it is a choice, but does that truly benefit Japan by keeping this low inheritance tax exemption when many countries are increasing the exemption and even getting rid of inheritance tax all together?