At some point my parents will pass away and my brothers and I will inherit a house and some money. Let’s say it’s about $1,000,000 divided by 3 beneficiaries. I heard there is a tax free portion of 300 man (let’s say $300,000) plus 60 man per beneficiaty ($180,000) for a total of $480,000. Then there is a 10% to 55% on the the remainder. Considering the worst case, (55%) I would have to pay 55% of my $333,333 portion to the Japanese Government, leaving me with about $150,000. Is this correct? This doesn’t include the inheritence taxes in my home country.
My brothers (who I trust) and I are considering keeping my parents house as a holiday house. Would it be worthwhile having me written out of the will, to avoid any taxes to Japan? Has anyone else found ways around this? Are there other loopholes? I understand that it would be difficult to bring inherited money into Japan without it being taxed, however I don’t really need this money to live off and could happily use it or invest it in my home country.
9 comments
They won’t find out unless you tell them. You think your home bank is going tell the Japanese government?
I guess you could just inherit the money and let it sit in your US bank account. Then use a bank card to spend it slowly or just leave it. You just always have to pretend it doesn’t exist though. You could never transfer the money to Japan since you’re supposed to declare foreign held assets.
It depends how long you’ve been in Japan, when the person passed, etc
Also, it looks like you’re covered by the tax free threshold anyway.
Of course I always pay all of my taxes and follow all of my most gracious host government’s directions. It is truly a PRIVILEGE to live here and I fully intend to give up all of my family’s assets to the glorious Japanese National Tax Agency! All hail! We must do our part to prop up the pension pyramid scheme!
The 480,000 is your tax free amount. Not the total for the inheritance. So you’d be tax free.
Because of that weirdly placed exclamation mark, all I can think of is “Inheritance Taxi” and wondering who would leave a taxi cab in their will.
You really should talk to a lawyer or tax accountant. When I once tried to read the inheritance laws, I was confused by both their complexity and irrationalness….
Inheritance tax is bullshit.
But it sounds like you’ll be safe. It would be better to ask about this at /r/JapanFinance to get a proper answer.
As /u/JimNasium123 mentioned if you’re the only beneficiary in Japan then the whole deduction will apply to the assets you inherit.
The marginal rates also do not apply to the full amount directly. It is only the portion taxable in Japan, and that amount is also split by number of statutory heirs to calculate the marginal rates.
But from the sounds of it all assets are foreign and you’re the only heir in Japan, in which case you should have no inheritance tax to pay as ~$333k (USD?) is less than the deduction you would receive.
There is a good explanation on the JapanFinance wiki here – https://www.reddit.com/r/JapanFinance/wiki/index/inheritance
Of course you should talk to an accountant to confirm the details.