NISA - New Information (oops! nevermind!)

[OkiBum]

Happy Holidays All!

I was hanging out with some friends this weekend and personal finance topic came up and we got talking about NISA. This was totally a shocker for me and I was surprised on how I missed this information. Maybe it is just me who did not know or maybe there are a few others like me who are unaware of this small detail so I thought I'd share it in the forum with the rest.

Old knowledge: Regular NISA
Investment Allowance - 1.2 million
Tax Benefit: Unlimited for 5 years and then the price resets at that point.

New knowledge:
Investment Allowance - 1.2 million
Tax Benefit: 1.2 million within 5 years

I initially thought he was mistaken so I questioned it, but he seemed quite certain so I did a quick check and turns out this is accurate.

NISA is intended for any residents of Japan aged 20 or more. With the NISA account, all
individuals are eligible for an exemption of the 20% levy on income from capital gains
and dividends from annual investments of up to one million yen (approximately US
$10,000) made over a five-year period as long as they reside in Japan.

The article mentions 1 million yen and I believe this was written when the NISA annual allowance was 1 million. This has been changed to 1.2 million as per our conversation.

Link to document: https://www.jsda.or.jp/en/activities/re ... s/NISA.pdf

So yeah, if you were aware of this information, that's great. If not, here is something important to note.

Cheers!

[Kanto]

Happy Holidays All!

I was hanging out with some friends this weekend and personal finance topic came up and we got talking about NISA. This was totally a shocker for me and I was surprised on how I missed this information. Maybe it is just me who did not know or maybe there are a few others like me who are unaware of this small detail so I thought I'd share it in the forum with the rest.

Old knowledge: Regular NISA
Investment Allowance - 1.2 million
Tax Benefit: Unlimited for 5 years and then the price resets at that point.

New knowledge:
Investment Allowance - 1.2 million
Tax Benefit: 1.2 million within 5 years

I initially thought he was mistaken so I questioned it, but he seemed quite certain so I did a quick check and turns out this is accurate.

NISA is intended for any residents of Japan aged 20 or more. With the NISA account, all
individuals are eligible for an exemption of the 20% levy on income from capital gains
and dividends from annual investments of up to one million yen (approximately US
$10,000) made over a five-year period as long as they reside in Japan.

The article mentions 1 million yen and I believe this was written when the NISA annual allowance was 1 million. This has been changed to 1.2 million as per our conversation.

Link to document: https://www.jsda.or.jp/en/activities/re ... s/NISA.pdf

So yeah, if you were aware of this information, that's great. If not, here is something important to note.

Cheers!

Sorry, what was it you were confused about initially?

Things are also set to change a bit in 2023 FYI.
https://www.retirejapan.com/blog/nisa-changes/

[adamu]

Your friend is wrong and the article you linked to is ambiguous.

The 1.2 million is the annual limit of the investments you can make, as you originally thought.
Capital gains and dividends are all tax-free during the 5 year period, as you originally thought.
There is no upper limit on the tax-free gains/dividends you can receive.

Here is the official info (in Japanese), which confirms this:
https://www.fsa.go.jp/policy/nisa2/abou ... index.html

[OkiBum]

Sorry, what was it you were confused about initially?

Things are also set to change a bit in 2023 FYI.
https://www.retirejapan.com/blog/nisa-changes/

My understanding was that if I invested 1.2 million this year and and lets say after 5 years it's value was 3 million, everything would be tax free.

As per this new information, 2.4 mill would be tax free and the remaining 600K would be taxed at 20%

[adamu]

My understanding was that if I invested 1.2 million this year and and lets say after 5 years it's value was 3 million, everything would be tax free.

That's correct. Your "new information" is actually misinformation.

[OkiBum]

My understanding was that if I invested 1.2 million this year and and lets say after 5 years it's value was 3 million, everything would be tax free.

That's correct. Your "new information" is actually misinformation.

OH!

Well this is great! I can send this link to him.

Is there a way to close this thread? Or should I simply just delete it?

[Kanto]

My understanding was that if I invested 1.2 million this year and and lets say after 5 years it's value was 3 million, everything would be tax free.

That's correct. Your "new information" is actually misinformation.

OH!

Well this is great! I can send this link to him.

Is there a way to close this thread? Or should I simply just delete it?

You could just edit your main post with a:

"....oops, never mind!"