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Be wary of your investments -- the TAXMAN is watching

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  • Originally posted by IparryU View Post
    THIS

    I really don't understand how someone can sign a contract, and send money somewhere without understanding what it is...
    Nor me, but it turned out that that's almost exactly what out banks were doing when they were busy borrowing money to buy up securitised, repackaged debt, derivatives and other "assets" from crooks in other financial institutions.

    It is almost as though complexity, in itself, became a selling point. If it is complicated - it must be clever.

    Comment


    • Originally posted by Brown Cow View Post
      Nor me, but it turned out that that's almost exactly what out banks were doing when they were busy borrowing money to buy up securitised, repackaged debt, derivatives and other "assets" from crooks in other financial institutions.

      It is almost as though complexity, in itself, became a selling point. If it is complicated - it must be clever.
      They make it complex on purpose... why else would you have 6 pages to explain something like a savings plan?
      1. you save x amount of money each month and for x many years
      2. these are the charges:
      1,2,3,4,5
      3. This is what happens if you die
      4. you cannot do this or that
      5. you can do this

      Taxes are even worse...

      Comment


      • Originally posted by IparryU View Post
        I just resolved a similar issue with my client last week. The client received a letter from the tax office regarding 3 transfers leaving and coming into Japanese accounts.

        So, by redeeming USD50K and having it sent to a Japanese bank it will flag in the system and you need to make a tax claim on this. By doing this, you are clear of all tax liabilities and you are doing what you should do. Note that depending on what the fund is (you weren't clear of that), you may need to back claim a few years on your taxes.

        Despite how quick you transfer the funds means nothing at all. Print out a valuation of the policy you are taking money out of, bring it to the tax office when you file, and let them deduce how much tax is to be owed. This is determine on the gains, so if you are in the red, declare it as a loss.
        For the policy valuation:
        1. Get a valuation for EACH YEAR YOU HELD IT. GET THE VALUATION FOR DEC 31 AND MAR 01
        2. Get the USD:JPY exchange rate for exact date your valuations are
        3. make a nice excel sheet of this with your profit/loss on the fund in USD and in JPY
        4. understand the position of the fund so when you go to the tax office you can confidently explain it
        5. if you are in loss, be sure to explain that you are sending USD50K to another "security" to make up for the losses

        When you get the money and TT it back out to the UK, make sure you make note that it is for a "security purchase". This does not need to be claimed until money is taken from the UK policy, but the note on the TT form would make it quite clear to the tax office (or whomever) the reason of USD50K coming and going so quickly.

        Buying GBP from USD is a good idea now. I got some GBP funds and exchanged my USD to GBP in my Shinsei account as the pound will appreciate against the dollar. Same for JPY:GBP, it is 5% up from it's all time low, so great timing there. For my personal situation, holding USD or GBP is never a bad idea as I can hold it for appreciation or use it when I go on vacation to the US/UK/EU. I just wish I had more JPY to use for my Japan spending and also to go into more GBP/USD funds... but I just don't have much JPY to play with.

        Regarding your funds... if you let us know what the funds are that would help out. It seems like DeVere got you or something...

        I just got done with my client and the whole tax office gig, so if you want any further info, let me know.
        Thank you - that is very very helpful. Though personally I still wonder - I have savings of just over 20 million yen but what those savings earn isn't even close to that. As for my working salary it's more like 4 million on paper. Do I really need to declare still?

        I didn't mean to imply I lost money. I didn't. I just didn't make any profit either because of fund management charges.I was with Zurich before and though I didn't lose money I didn't make any either.My mom's financial advisor sorted that out. I also have a Generali Account. Same thing. I haven't lost anything, but nor have I made anything. My Mom lost a lot through Canada Life. Thousands and thousands of pounds to be honest.

        I know that if I managed my own funds I could probably do better but - I'm really not that savvy. Fund management is the way to go for someone like me. I admire those of you that are successfully playing the markets. I don't think I could do it myself.

        Comment


        • Originally posted by renkachan71 View Post
          Thank you - that is very very helpful. Though personally I still wonder - I have savings of just over 20 million yen but what those savings earn isn't even close to that. As for my working salary it's more like 4 million on paper. Do I really need to declare still?

          I didn't mean to imply I lost money. I didn't. I just didn't make any profit either because of fund management charges.I was with Zurich before and though I didn't lose money I didn't make any either.My mom's financial advisor sorted that out. I also have a Generali Account. Same thing. I haven't lost anything, but nor have I made anything. My Mom lost a lot through Canada Life. Thousands and thousands of pounds to be honest.

          I know that if I managed my own funds I could probably do better but - I'm really not that savvy. Fund management is the way to go for someone like me. I admire those of you that are successfully playing the markets. I don't think I could do it myself.
          You do not really need to declare, but all you need to do to declare is print a valuation at the time of filing, and fill in the section to declare that. I have heard (not seen any proof) that people declare losses/gains and have had to pay or receive a tax benefit from the loses... but I have seen no proof of that. If you take a withdrawal from the policy, then you would need to declare that and the tax clerk would assist you on how to fill the form in and what to actually declare it as. Some foreigner tax advisers would say not to even declare it, but I personally do not like to "hide" it as it may cause issues for me later on (I am American).

          Regarding Zurich (Vista?) and Generali (Vision?), I am always curious as to why people start two savings plans. From many of my clients that I get, they take out a second plan because the first one was under-performing and the advisor said that it would be good to start a new one and get bonuses to make up for the losses... You actually blanket yourself in two policies with 2 desperate charge schemes, and typically, the client would decrease their premium amount or stop paying premiums to fund the other account. This creates a higher management fee as you are not paying the premium. Even if you decrease the premium, the management fee is measured by the highest premium you have paid in the life of the plan... so you are essentially increasing the charges and also adding additional charges by starting a second plan.

          To get a plan back in "gear", you need to be in the right funds. The advisor gets paid when you start the plan and they usually take a 1% management fee (this is completely separate from the management fee from Zurich/Generali) to manage your plan. They should be recommending funds and looking after your plan as they got paid in advance. But, most advisors do not and that is where the issue starts... from the very beginning.

          You can remove the advisor's fee from you policy by emailing the company direct and issuing the instruction to do so. Despite that, you still would need to get your funds in order. So when you send the instruction, your advisor would try to butter you up by saying he/she will give some fund recommendations if you put the advisory fee back in place... which is BS because they should have done it in the first place.

          Mind you, picking your own funds is not always the right way to go as:
          1. you may not be making a good decision
          2a. your advisor may have allocated a good fund selection, but the markets are down
          2b. when the markets go down it is good as you are purchasing more units (this is how dollar cost averaging works)
          2c. not all funds recover when the markets go down, so this may also be bad for you
          3. you need to understand that there is fund switch and premium redirection... on the form it does not always clearly state what this means. Zurich fund switch forms are one of the more confusing forms and are highly prone to mistakes if you mess up the fund code. Whereas Generali's forms are very straight forward and explain what each section is for and why you would fill it in.

          So keep this in mind as you don't want to make a bad move and you also don't want your advisor making a bad move either. Both which you don't know until later down the road and this is where trust and patience comes in.

          When I get savings plans that are breaking even or in the red, I try to make it clear as to why it is like this and what needs to be done. This is also not a quick process, as in order to make up for the loses or get in the green, it takes time for the funds to make money... sounds like a horrible excuse, but a fund switch and redirection will NOT make immediate results.

          One of my clients who I have taken over was USD10K in the red, it took a year to get it in the green, but now the client has seen some positive changes despite the low markets and when the markets go up, so will the value of the plan. There were many times where I had to explain everything over and over again, but now the changes are showing results and the client is feeling a bit better. It is horrible having to be in this position because of some other advisor's neglect, but it worked out.

          Get on the phone with your adviser and ask all the questions you need to understand what is going on. If you don't, you wont understand what your adviser is doing and you will have to worry about your plans rather than concentrating on work and living an enjoyable life.

          I hope this cleared up some things for you.

          Comment


          • Are there any discount brokerages available in Japan? I'd be interested in purchasing some Exchange Traded Funds (ETF) and Index Stocks for the U.S. / Canada, International markets.

            I've read about some that are available like DB Vickers in Singapore and one in Hong Kong - forget the name - but their commissions are very high. But I've heard they're still popular with American, Canadian and Australian ex-pats because such accounts don't threaten their non-residency status in their home countries.

            My understanding is that the Japanese government and corporations have made it hard for Japanese people to invest in Stocks -e.g. forcing individual customers to buy large sums of shares in a single transaction.

            Do any discount brokers exists in Tokyo like those that are available to foreign expats in places like Singapore and Hong Kong?

            Comment


            • Originally posted by Shimokitazawa View Post
              Are there any discount brokerages available in Japan? I'd be interested in purchasing some Exchange Traded Funds (ETF) and Index Stocks for the U.S. / Canada, International markets.

              I've read about some that are available like DB Vickers in Singapore and one in Hong Kong - forget the name - but their commissions are very high. But I've heard they're still popular with American, Canadian and Australian ex-pats because such accounts don't threaten their non-residency status in their home countries.

              My understanding is that the Japanese government and corporations have made it hard for Japanese people to invest in Stocks -e.g. forcing individual customers to buy large sums of shares in a single transaction.

              Do any discount brokers exists in Tokyo like those that are available to foreign expats in places like Singapore and Hong Kong?
              This all depends on how much you are putting down. Loads of options, but it really depends on how often you want to trade, and how much you want to invest, if you want multiple currency cash accounts, etc.

              Comment


              • Originally posted by IparryU View Post
                You do not really need to declare, but all you need to do to declare is print a valuation at the time of filing, and fill in the section to declare that. I have heard (not seen any proof) that people declare losses/gains and have had to pay or receive a tax benefit from the loses... but I have seen no proof of that. If you take a withdrawal from the policy, then you would need to declare that and the tax clerk would assist you on how to fill the form in and what to actually declare it as. Some foreigner tax advisers would say not to even declare it, but I personally do not like to "hide" it as it may cause issues for me later on (I am American).

                Regarding Zurich (Vista?) and Generali (Vision?), I am always curious as to why people start two savings plans. From many of my clients that I get, they take out a second plan because the first one was under-performing and the advisor said that it would be good to start a new one and get bonuses to make up for the losses... You actually blanket yourself in two policies with 2 desperate charge schemes, and typically, the client would decrease their premium amount or stop paying premiums to fund the other account. This creates a higher management fee as you are not paying the premium. Even if you decrease the premium, the management fee is measured by the highest premium you have paid in the life of the plan... so you are essentially increasing the charges and also adding additional charges by starting a second plan.

                To get a plan back in "gear", you need to be in the right funds. The advisor gets paid when you start the plan and they usually take a 1% management fee (this is completely separate from the management fee from Zurich/Generali) to manage your plan. They should be recommending funds and looking after your plan as they got paid in advance. But, most advisors do not and that is where the issue starts... from the very beginning.

                You can remove the advisor's fee from you policy by emailing the company direct and issuing the instruction to do so. Despite that, you still would need to get your funds in order. So when you send the instruction, your advisor would try to butter you up by saying he/she will give some fund recommendations if you put the advisory fee back in place... which is BS because they should have done it in the first place.

                Mind you, picking your own funds is not always the right way to go as:
                1. you may not be making a good decision
                2a. your advisor may have allocated a good fund selection, but the markets are down
                2b. when the markets go down it is good as you are purchasing more units (this is how dollar cost averaging works)
                2c. not all funds recover when the markets go down, so this may also be bad for you
                3. you need to understand that there is fund switch and premium redirection... on the form it does not always clearly state what this means. Zurich fund switch forms are one of the more confusing forms and are highly prone to mistakes if you mess up the fund code. Whereas Generali's forms are very straight forward and explain what each section is for and why you would fill it in.

                So keep this in mind as you don't want to make a bad move and you also don't want your advisor making a bad move either. Both which you don't know until later down the road and this is where trust and patience comes in.

                When I get savings plans that are breaking even or in the red, I try to make it clear as to why it is like this and what needs to be done. This is also not a quick process, as in order to make up for the loses or get in the green, it takes time for the funds to make money... sounds like a horrible excuse, but a fund switch and redirection will NOT make immediate results.

                One of my clients who I have taken over was USD10K in the red, it took a year to get it in the green, but now the client has seen some positive changes despite the low markets and when the markets go up, so will the value of the plan. There were many times where I had to explain everything over and over again, but now the changes are showing results and the client is feeling a bit better. It is horrible having to be in this position because of some other advisor's neglect, but it worked out.

                Get on the phone with your adviser and ask all the questions you need to understand what is going on. If you don't, you wont understand what your adviser is doing and you will have to worry about your plans rather than concentrating on work and living an enjoyable life.

                I hope this cleared up some things for you.
                Thank you so much. Really.

                As for why people take out more than one policy. Well I guess in my case it was not wanting to put all my eggs in one basket/hedging my bets. You're absolutely right that I'm putting myself in the position of paying high management fees in not one but several cases. It was also that I didn't know where I would be retiring to so a mix of currencies seemed attractive to me at the time.

                Comment


                • Originally posted by Shimokitazawa View Post
                  Are there any discount brokerages available in Japan? I'd be interested in purchasing some Exchange Traded Funds (ETF) and Index Stocks for the U.S. / Canada, International markets.

                  I've read about some that are available like DB Vickers in Singapore and one in Hong Kong - forget the name - but their commissions are very high. But I've heard they're still popular with American, Canadian and Australian ex-pats because such accounts don't threaten their non-residency status in their home countries.

                  My understanding is that the Japanese government and corporations have made it hard for Japanese people to invest in Stocks -e.g. forcing individual customers to buy large sums of shares in a single transaction.

                  Do any discount brokers exists in Tokyo like those that are available to foreign expats in places like Singapore and Hong Kong?
                  https://www.rakuten-sec.co.jp/

                  Comment


                  • Originally posted by renkachan71 View Post
                    Thank you so much. Really.

                    As for why people take out more than one policy. Well I guess in my case it was not wanting to put all my eggs in one basket/hedging my bets. You're absolutely right that I'm putting myself in the position of paying high management fees in not one but several cases. It was also that I didn't know where I would be retiring to so a mix of currencies seemed attractive to me at the time.
                    A mix of currencies is not a bad thing, but if you do not know where you may retire, GBP is a good position. I am trying to hold as much GBP as I can and I have never even been to the UK. But the pound is always stronger than the dollar, but it is also very weak vs USD and JPY now, so I see it as an opportunity to get more GBP in my account.

                    Not sure what fund selection you have in Zurich and Generali, but you IF you have to pick one, go for Generali as in long term, it has a better bonus structure that almost nullifies the fees, and they have direct funds whereas Zurich has mirror funds. You also have to make sure your funds are good, but that is where your adviser has to step up to the plate and get organized for you.

                    Comment


                    • Back on the tax stuff, this document (released last month) from the NTA itself has something interesting information.
                      http://www.nta.go.jp/foreign_languag..._pdf/2012e.pdf

                      Comment


                      • Originally posted by fxgai View Post
                        Back on the tax stuff, this document (released last month) from the NTA itself has something interesting information.
                        http://www.nta.go.jp/foreign_languag..._pdf/2012e.pdf
                        It's quite a document. Is there a particular point you want to highlight? "Interesting" wasn't the word that came to my mind when I flicked through it...

                        Comment


                        • Originally posted by fxgai View Post
                          Back on the tax stuff, this document (released last month) from the NTA itself has something interesting information.
                          http://www.nta.go.jp/foreign_languag..._pdf/2012e.pdf
                          It's the annual NTA report, they publish it every year, also in English. It's full of statistics, some of them with the intention to scare tax dodgers, but the 2012 report contains nothing new in regard of "foreign" taxpayers in Japan.

                          Comment


                          • Originally posted by Tatsuo View Post
                            I am with rakuten. It's directly linked to my Shinsei bank savings accounts, I can access both with 1 log in. Rakuten is cheap and fast.

                            Comment


                            • Originally posted by renkachan71 View Post
                              Thank you - that is very very helpful. Though personally I still wonder - I have savings of just over 20 million yen but what those savings earn isn't even close to that. As for my working salary it's more like 4 million on paper. Do I really need to declare still?
                              If you have been staying longer than 5 years in Japan, you have to declare any income abroad worldwide regardless how much you earn in Japan.

                              Comment


                              • Originally posted by chainbolt View Post
                                It's the annual NTA report, they publish it every year, also in English. It's full of statistics, some of them with the intention to scare tax dodgers, but the 2012 report contains nothing new in regard of "foreign" taxpayers in Japan.
                                Nothing new or is there? As I'm sure many have noted, the tone of the English is either factual or stern. If anything, it tends toward being cautionary in tone. Actually, there may be something new (or news to me). Somewhere while reading and perusing, I found that we have the right (now??) to revisit tax returns filed up to 5 years ago. When I was audited, I signed a paper stating that I understood I had a very short window (5 days, I think) in which I could contest the findings. If it is true that I can contest the audit, absolutely I will. I believe I could get over 1 million yen returned.

                                Comment

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