TLDR: Kindly requesting feedback from this subreddit’s inheritance tax “gurus” on a proposed plot I developed for effective rate of total tax on an inheritance. If the feedback is positive, I will make a separate post with many plots of various inheritance scenarios.
I’ve been developing an Excel spreadsheet that plots effective rate of total tax on an inheritance based on the statutory heirs. It uses the methodology as described on [this webpage from Shika Law](https://www.shikalaw.com/post/japan-estate-tax-consideration-part-2-calculation-of-inheritance-tax-in-japan) and [this webpage from Chester Tax](https://chester-tax.com/encyclopedia/8987.html). I confirmed that it gives correct answers for all of the example calculations on both of those webpages.
Here is an example plot I made for the scenario where the statutory heirs are the spouse and 1 child. The purpose of this plot is just to get a visual sense of how much total inheritance tax will be owed by the actual heirs, depending on how much of the actual inheritance goes to the spouse. This plot is not intended to give a breakdown of how much tax will be owed by each individual heir.
https://preview.redd.it/rc0hpbddcfkc1.png?width=1370&format=png&auto=webp&s=5d88f84dade644052cfae6213b3e9bbb23c80365
Here are some examples using the plot.
Example 1: If the net taxable asset is ¥120M and the statutory heirs are a spouse and one child, the total tax for all actual heirs would be about:
* 0% of the net taxable asset if the spouse’s share is 100%
* 2.5% if the spouse’s actual share is 75%
* 5% if the spouse’s share is 50%
* 7.5% if the spouse’s actual share is 25%
* 10% if the spouse’s share is 0%.
Example 2: If the net taxable asset is ¥500M and the statutory heirs are a spouse and one child, the total tax for all actual heirs would be about:
* 15% of the net taxable assets if the spouse’s actual share is 50% or more
* 22.5% if the spouse’s actual share is only 25%
* 30% if the spouse’s actual share is 0%.
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I’m sure you are looking at the plot and trying to see if it matches your understanding of how the inheritance calculation works. It may help you to look at the marked up plot below which explains how I think it works.
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https://preview.redd.it/nptdx5k9cfkc1.png?width=1370&format=png&auto=webp&s=95e0ba768f99df006292deb4ea2d55c02f40116a
I am interested in your feedback…
Do you think this plot is correct?
Do you have any suggestions on how to improve it? For example, is it clear that above the curves for 100%, 75% and 50% are overlapping? I wasn’t sure how to make that clear, so I marked the curves on the right as 0%, 25% and 50%+ to try to make it clear.
Do you think it would be helpful to make a new post with plots for various scenarios? My intention is to help people more quickly assess how much inheritance tax to expect, which is a question that comes up a lot in this subreddit. However it will not help people who just received an inheritance and are trying to calculate an exact scenario.
FYI, the scenarios I was planning to plot and put in the new post are when the statutory heirs are:
* spouse + 1 child
* spouse + 2 children
* spouse + 1 parent
* spouse + 2 parents
* spouse + 1 sibling
* spouse + 2 siblings
* no spouse
by shrubbery_herring
