declaring foreign assets on Japanese tax return

[Wales4rugbyWC23]

I think it is very likely next year that the assets due to the purchase of a house in the UK will go over 50 million yen. Has anyone had experienced reporting this on their Japanese tax return, specifically British financial assets. I know there is a special box for this on the Japanese tax return. Needless to say I am going to talk to my accountant about this, but I very much doubt she has that much knowledge of it.

Any advise would be appreciated

[captainspoke]

I think the form you want is called 国外財産調書. Ask at your tax office--they will have that and some explanatory instructions. I don't think this is a part of (or indicated on) the actual tax return, i.e., no special box. While it may be filed/submitted at the same time as your return, it can also be mailed in before/after, or dropped off in person. In following years you'll then get an advance mailing of the form/instructions.

[Wales4rugbyWC23]

I think the form you want is called 国外財産調書. Ask at your tax office--they will have that and some explanatory instructions. I don't think this is a part of (or indicated on) the actual tax return, i.e., no special box. While it may be filed/submitted at the same time as your return, it can also be mailed in before/after, or dropped off in person. In following years you'll then get an advance mailing of the form/instructions.

Thank you for that, my non- Japanese financial assets are below the 50 million level, but they are very likely to go over because I am going to buy a house. A follow up question, What is the Japanese tax office attitude to the taxation of the rent/income? I have always done a British tax return for the income before.

[RetireJapan]

Thank you for that, my non- Japanese financial assets are below the 50 million level, but they are very likely to go over because I am going to buy a house. A follow up question, What is the Japanese tax office attitude to the taxation of the rent/income? I have always done a British tax return for the income before.

You will probably have to declare it and will be able to deduct taxes paid to the UK from taxes due here (if any). From this year I believe you can no longer depreciate real estate abroad, something that was an extraordinarily good deal while it lasted...

[captainspoke]

Sorry, no idea on rent, or things like property depreciation (which I've read is changing), and so on.

By coincidence: https://www.reddit.com/r/japanlife/comm ... financial/

[Wales4rugbyWC23]

Sorry, no idea on rent, or things like property depreciation (which I've read is changing), and so on.

By coincidence: https://www.reddit.com/r/japanlife/comm ... financial/

That was me mate!!
It really is a small cyber world for personal finance in Japan.

[Jake]

I think it is very likely next year that the assets due to the purchase of a house in the UK will go over 50 million yen. Has anyone had experienced reporting this on their Japanese tax return, specifically British financial assets. I know there is a special box for this on the Japanese tax return. Needless to say I am going to talk to my accountant about this, but I very much doubt she has that much knowledge of it.

Any advise would be appreciated

If you are under the 50million rule now, and will go over it with the purchase of a house, that indicates you will borrow money to do so? As a hypothetical, if you borrowed 40 million to buy a 40 million house, can that house actually be an asset or does one cancel out the other?
There is tax relief here when you have a mortgage....

[RetireJapan]

If you are under the 50million rule now, and will go over it with the purchase of a house, that indicates you will borrow money to do so? As a hypothetical, if you borrowed 40 million to buy a 40 million house, can that house actually be an asset or does one cancel out the other?
There is tax relief here when you have a mortgage....

I believe mortgages and loans are not taken into account when calculating the value of real estate.

On the other hand, declaring assets over 50m yen abroad as required by the law here is NOT a taxable event. You just have to tell them about the assets, not pay tax on them.

[TokyoWart]

I don't have experience with reporting foreign real estate (since I don't have any) but I checked and there are three places on my Japanese tax return where foreign assets were reported:

所得の内訳書
Has the account (e.g. "Vanguard") and any income from it
(most of the entries are for Japanese accounts and my salary but I noticed that it also lists the foreign ones and this is the only form which seems to within the same electronic filing as the tax return)

国外財産調書合計表
This form has fields for real estate (土地, 建物, 山林, etc.) and also for things like 貸付金 and 未収入金

財産債務調書合計表
In addition to domestic assets this has a field for "国外財産調書に記載した国外財産の価額"

When I look at the pdf files I received there are two different time stamps for the receipt of the electronic reports so I think these work out to be separate electronic filings.

[eyeswideshut]

I believe mortgages and loans are not taken into account when calculating the value of real estate.

On the other hand, declaring assets over 50m yen abroad as required by the law here is NOT a taxable event. You just have to tell them about the assets, not pay tax on them.

I can confirm this is correct - you do not subtract the debt owed from the asset value when declaring overseas assets. As mentioned above you need to attach a 海外財産調書 where you list the assets and their value (building and land should be listed as separate line items) and a 海外財産調書合計書 where you add up the totals by category. You also need to list all other assets and cash and where they are kept (bank name and address etc.). It seems you don't need to specify what stock or currency it is so it looks like: 上場株式　一般用　　[BROKER ADDRESS] [#OF SHARES] [VALUE IN YEN AS OF 12/31]

You only pay tax on any income, not the assets. However, be careful because they will likely use the info next year to see if you made any sales which should accrue capital gains tax.