Hi. Sorry for yet another inheritance post but I have trouble understanding it applied on my case. When my father passed away, I made a lot of calls to the tax office and they didnt know how to answer me because they didnt understand how my country inheritance works; so in the end because I only received at that point few money from the sale of a vehicle, it was below the basic deduction so I was told “dont worry, you dont need to declare it”.
I was also worried about the 10 months deadline to fill the declaration, so I rushed to research and ask everyone during that time.
Its been almost 3 years since then, but I could receive a big chunk from the inheritance now and I have no idea how to even explain this situation to tax officers.
Background: My father passed away in 2020, and I lived alone in japan since 2015. But in my country there is no a “one time succession” procedure, the deceased person becomes a “ghost individual” which still posses assets and pay taxes. Succession takes years, and may never finish. Its normal to do business with “ghost individual” that died 15 or 20 years ago. Its a slow and length judiciary process. There is a legal declaration of heirs, and after that each asset may be transferred on an asset by asset case, doing a valuation and payment of taxes each time. So for example a real state only gets valuated and transferred when a buyer is found, until then is kinda pointless and expensive to make a property rights transfer. I have a brother back home, never been in Japan.
In 2021, one asset (a vehicle) was sold bellow market value, receiving half each brother. I received about $10k USD and called tax office: if that was the whole inheritance, the value was bellow basic deduction so dont worry, but it was over 10months since decease and also have no document proving the whole inheritance value. I called again and asked what if I declare it as an income, but was told if the sold price was bellow the acquisition price, there was no income so nothing to tax.
Now the problem is that in 2024 I might be transferred some participation in a company. My father share was 50% valued in about $700k USD, and will be split 25%/350k to each brother. The company can not be easily sold, so if I have to pay taxes from that I would not be able to pay it for years.
I understand that I would have a 3000万+600万x2 basic deduction, so just this asset (the 50% shares) would leave around (700000*150-(3000+600×2)*10000) 63M JPY as taxable amount. But I dont understand how much should I owe. If its for example half of that (my brother not having to pay anything to japan), is still on the 15% bracket so I will owe above 4M JPY in taxes? Its almost two years of my full take-home income and I dont have savings.
To make things weirder, I naturalized this year so Im japanese citizen, but my father died when I was foreigner.
Points/questions:
-There is no way to produce any official document stating the total value of inheritance. I can only produce the judges ruling on each asset transfer, only after its done. So if I declare now for the company shares, maybe in 3 years I will receive some land or a home, and in 15 years maybe another home; I have no way to know.
-Will I get into any problems for attempting to declare inheritance after years of the decease?
-Does having an inheritor abroad have any impact on my taxes liability? I owe only for the part I actually receive, or I have to pay in accordance with my fathers total assets? (including what my brother receives)
-I dont intend to evade taxes, but is there a way to delay paying? Real state and companies are not something you can make cash quickly to just pay its taxes. I will be receiving a lot, but that in practical terms means nothing to me in the short term.
-My country doesnt have agreements with Japan so Japan will probably never know. For practical reasons I was thingking renouncing the transfer of my shares so my brother gets everything, and if and when he manages to sell it years from now, receive half of it as a gift. But this could be seen as tax evation? Unlike in japan, inheritors can reject their part on an asset by asset basis.
Thank you and sorry for the long post.
by Hot-Coconut-825