I read the Inheritance wiki page and saw 2 confusing points. Could someone please clarify?
First:
Surviving spouses have large tax credit. Basically you find out how much inheritance tax the spouse is theoretically supposed to pay, and then you reduce that bill to the extent that it corresponds to an inheritance valued at less than 160 million yen (or 50% of the estate, whichever is larger).
I cannot understand the bold part. There is a this pdf file that states seemingly a different thing: the spouse inheritance tax payment is reduced by 160M or the spouse's share of inheritance, whichever is larger.
Second:
3/ Then the crucial final step is to add all the tax liabilities together (770万円 in our example) and distribute them proportionally according to the actual distribution of the assets that are subject to Japanese inheritance tax.
In the 1億円 example, the total Japanese inheritance-tax liability is 770万円. If the Japan-resident sibling inherits all assets included in the "total value of the estate", the Japan-resident sibling would be assigned the entire Japanese tax liability, thus they would owe 770万円 on their 1億円 inheritance. The non-Japanese resident sibling, regardless of what they received, would not be taxed.
In this example, the Japan-resident sibling has to pay all 100% tax liability of the asset.
- Should he/she pay 50% of the tax liability if he/she only receives 50% of the asset, which is the typical case? The non-Japanese resident sibling does not pay tax, thus only 50% of the tax liability is paid?
- In the extreme case, if the Japan-resident sibling actually receive 0% of the asset, then could he/she not pay any tax, and thus none of the tax liability should be paid?
by thntk