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Inheritance Law in Japan

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  • Inheritance Law in Japan

    Recently, my Japanese in-laws (retired, early 60s) have started asking if I plan to stay in Japan long term. I've lived here 8 years, married to their daughter, we have a son, and yes we plan to make it home. After this conversation, they started dropping hints about 'helping' us to buy our own condo.

    Now, I dont know much about finance in Japan. I've heard that inheritance money is taxed up the wazoo. Is there a way for people to get around this BEFORE they die, perhaps by older folks giving 'gifts' to their kids, buying them property, etc? In my wife's case, she is an only child, so she is gonna get everything anyway once they are gone. SO it makes sense to start planning for how to beat the taxman as much as possible.

    Any advice, hints, etc? Thanks in advance.

  • #2
    YUp inheritance is taxed to the max here, specially if there is a lot of it. "Giving gifts" to family is a way around it.

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    • #3
      only 2 things are certain..

      its been a while since i looked into it but...
      They can gift X amount to help the daughter build a house but cant remember if 20 or 30 mio..

      My wife is registered as the daughter of her grandfather thereby reducing the tax liability when he pops his clogs.Dont know if there is an age limit but you can probably do the same with your son. your outlaws are young so they will be around for quiet some time if its a min age of 18.Each family member i think gets an exemption of about 50-70 mio..

      Would help a lot if the father in law pops his clogs before the mother in law, but keep that to yourself..

      Top rate is 50% anything over and above 300mio yen. You'll need to pay the taxes b4 selling anything
      Insurance may be a way to ease the burden if they are swimming in cash.
      Forget about trusts or LLC's those days are long gone..

      There have been a few other similar posts, so roll your sleeves up big boy and get reading..

      Of course..

      you could keep it simple, and get in front of an expert; expect about 200K for a 45 min consultation..


      Regards

      Robert Akashi

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      • #4
        Does Japan have probate court system similar to Americas? In some states you can get totally fxxxct in probate court even if you are an only child and the last living relative. I think it's called
        検認法廷

        http://ja.wikipedia.org/wiki/遺言

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        • #5
          Originally posted by R.Akashi
          My wife is registered as the daughter of her grandfather thereby reducing the tax liability when he pops his clogs.
          Daughter of her grandfather? That's an interesting trick.

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          • #6
            When in Japan...

            all legit G6

            so on paper she is her fathers sister

            all this to reduce the IHT by 20%..!!

            and now you know the reeeeeeeeeeeeeest of the story...!!

            Robert Akashi

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            • #7
              If it's cash can they make use of joint accounts, either here or abroad, with the money available to either or survivor.

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              • #8
                Did some trawling around on the internet... turns out you can gift up to 1,100,000 yen each year and have it be tax free for the receiver. (Found that tidbit out on the following site
                http://zouyo.sblo.jp/)

                Inheritance tax has a pretty hefty deductibe (50mm + 10mm per each inheritor), so don't rush into any funky tax minimizing schemes before you figure out what your actual inheritance tax hit might be. I think a lot of people panicked in the bubble years because they were hit with massive inheritance bills when grandpa passed on and bequeathed a family shed in Shibuya worth gazillions of dollars. I don't get the sense that its such a massive problem nowadays. (That's just a gut feeling though... never had to deal with this myself).

                More info (in Japanese) at the site below, which will probably tell you everything you want to know about inheritance in Japan.

                http://isansouzoku.nyukon.com/main/036.html

                M.

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                • #9
                  I don't know how large the exclusion is but I've heard that, unlike the U.S., the recipient is taxed on the gift here. If you're thinking in terms of condo purchase levels of cash, it might be worth checking with an accountant / zeirishi.

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                  • #10
                    Very interesting laws are there on inheritance. I think no other countries in the world have such kind of rules.
                    Thanx for the link Majestic.

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