Lump sum tax free windfalls, Japan tax and investments

[Bubblegun]

This year I will have an endowment policy mature with an estimated 40,000 pounds. While this isn’t a fortune, it is by no means candy money.

The problem I have is what to do with it.
I clearly am not going to blow it on a new car etc etc but to reinvest it.

Now bringing 40g to Japan will probably invite taxes, and since the endowment is in the UK, and I am not UK resident.....I don’t think I can put the money in say a UK tax efficient fund.
And c) leaving it sitting in a bank account earning peanuts seems rather bad once inflations starts to eat away at its value.

Any ideas or advice on anyone bringing money into Japan? Or leaving money back home?
Thank you in advance.

[Moneymatters]

This year I will have an endowment policy mature with an estimated 40,000 pounds. While this isn’t a fortune, it is by no means candy money.

The problem I have is what to do with it.
I clearly am not going to blow it on a new car etc etc but to reinvest it.

Now bringing 40g to Japan will probably invite taxes, and since the endowment is in the UK, and I am not UK resident.....I don’t think I can put the money in say a UK tax efficient fund.
And c) leaving it sitting in a bank account earning peanuts seems rather bad once inflations starts to eat away at its value.

Any ideas or advice on anyone bringing money into Japan? Or leaving money back home?
Thank you in advance.

Decent discussion to be found here.
viewtopic.php?f=2&t=1156

I'm in a similar situation and, as I'm reluctant to convert from GBP to yen at the current rate, I decided to look for a investment account with access to GBP investment funds. Preparing to self report cap gains to the Japan tax authorities as an when I have something to report.

So I now have a Trading 212 account. <insert meme here>
This is permitted from Japan but you will be limited to either a USD or EUR account.
This doesn't matter if you until you try to transfer some of that 40K GBP into your Trading 212 account.
This is where I'm stuck at the moment. Looking like I might need to open a Revolt account to handle the currency exchange prior to deposit. All info online contradicts and I'm pending a straight answer from Trading 212. Straight answers appear to rationed nowadays.

Be keen to know what you decide. Also, keen to know how that endowment might be handled from a Japan tax perspective.

[RetireJapan]

Now bringing 40g to Japan will probably invite taxes, and since the endowment is in the UK, and I am not UK resident.....I don’t think I can put the money in say a UK tax efficient fund.

If you are not permanently tax-resident (living in Japan for less than five years) you may owe Japanese taxes on the capital gain. If you bring the money to Japan you probably will owe taxes on it.
If you are permanently tax-resident (in Japan for more than five years) then you probably owe Japanese taxes, so bringing the money to Japan makes no difference. Moving money is not a taxable event.

Don't have any ideas as to what you can do with it in the UK, apart from maybe Premium Bonds

[Bubblegun]

It appears to be a catch 22 situation.
I could understand Japan wanting its share if I started it while I was living in Japan but this was started when I lived in the uk.

I suppose if the exchange rate goes back to the dizzy highs before the financial crisis then it would be worth bringing it over here. But at today’s current rates it’s probably better to leave it sitting in the uk. And wait until I fly home for a holiday and then exchange some money and bring some cash into Japan. But I wonder what the likk my it’s could be?

It might be worth flying over for a holiday, as we do, open up a kids bank account, and pop it in there, and see if it can get higher interest. ( certainly more than Japan)
Since they’re under 16 I still have control over it.

Might ask my brother to open up something for them, and I can put the money in there.

I did a google check on how much we can bring in and we must declare anything 1 million yen or over at immigration.
There seems to be a reporting requirement if you have https://www.tytoncapital.com/investment ... shore-tax/ over 50 million yen in foreign assets.

[Jansen]

It appears to be a catch 22 situation.
I could understand Japan wanting its share if I started it while I was living in Japan but this was started when I lived in the uk.

Would you have to pay any tax if it matured while you were still living in the UK?

[Tkydon]

Bubblegun,
You do not clearly state how long you have been in Japan. This is crucial information to be able to answer your questions.
I saw from another thread that you have been out of the UK since 2005. Can I assume this is the amount of time in Japan?
If you have been resident in Japan for more than 5 years in the last 10, you are treated as Permanent Resident For Tax Purposes, whether you have PR or not, and you global income of all kinds is liable to Japanese Taxes whether or not you bring the money to Japan.

An Endowment is subject to Capital Gains Tax as you have paid moneys in over the years, and you are now taking that money out.

You should receive a statement with the payout that states how much you paid in and how much you received.

You are liable for Capital Gains Tax on the Gain

GBP 40,000 - (sum of all contributions) x TTB Exchange Rate on the Day you receive the funds.

Assuming you have no other Capital Gains in the same year, can deduct the Capital Gains Allowance of JPY 500,000 from that value. (approx GBP 3,300)

You can elect to have the Net Capital Gain after the Capital Gain Allowance deduction taxed as:
1. Aggregate Taxation Method at your Marginal Tax Rate - Form B - Pages 1&2
X % National, 2.1% of the X% Reconstruction, and 10% Residential Taxes
or
2. Separate Self-Assessment Taxation Method at the Capital Gains Tax Rate - Form B - Pages 1&2 And Page 3
20.315% (15% National, 0.315% (i.e. 2.1 % of 15%) Reconstruction Tax, and 5% Residential Taxes.


Say, you paid in a total of GBP 30,000 over the years
Capital Gain would be GBP 40,000 minus GBP 30,000 = GBP 10,000
Converted to JPY at TTB Rate
Approx JPY 1.5M
Minus JPY 0.5M Capital Gain Allowance

Net Taxable Gain Approx JPY 1M

Total tax under 2. Separate Self-Assessment Taxation Method
Approx JPY 203,000 (Approx GBP 1,350)

Then you can do what you like with the money; send it to Japan or leave it in the UK....