Simple Q&A - NISA

[MisoSoup]

On SBI for the Junior NISA accounts there are 3 kinds of Junior NISA Accounts listed (NISA Deposit, NISA Specific, and NISA General). I know for usual accounts Specific - means that they deduct the tax automatically and General means that they don't do anything regarding tax. Why are there these three options, when the accounts are non-taxable?

Thanks in advance.

[KCLenny]

Hi all, so I just recently opened an account with Rakuten, I believe I have the Tsumitate NISA.
I’m just wondering how I get start, and what the general rules and advice are for it? I can spare around ¥30,000 a month. I just don’t really understand the layout of the website and how to get money into the account and what’s a general good investment option. I don’t want to have to deal with exchange rates and declaring anything to America (I’m not American!), and I plan to live in Japan for the rest of my life (currently only 29).
Any guidance in the right direction would be greatly appreciated.

[tokyolights]

First of all, I'd like to thank everyone for posting helpful information and guidance, I've learned a lot from reading posts on this forum.

I'm currently looking into NISA for some initial small investments as a student, and would like to clarify one small detail regarding rollover.

At the end of 2025, you can either let your 2021 investments expire into a taxable account, or roll them over for another year, consuming your 2026 allowance.

The point that confused me here is "roll them over for a other year". From what I understood, when you roll over, aren't those assets now tax-free for *another five years*, not just "another year"?

So, if I buy assets in 2021, they'll be tax free until 2025. Then I can decide to roll them over into my 2026 allowance. Since my 2026 allowance is meant to be for purchasing assets that will stay tax-free until 2031, I assumed that my rollover assets would also behave the same way, staying tax-free until 2031. Is that correct?

Also, another question. What happens in 2031? I assume I am not allowed to roll over assets that have already been rolled over before, so I am forced to move them into a taxable account at that point. Is this correct?

[adamu]

At the end of 2025, you can either let your 2021 investments expire into a taxable account, or roll them over for another year, consuming your 2026 allowance.

The point that confused me here is "roll them over for a other year". From what I understood, when you roll over, aren't those assets now tax-free for *another five years*, not just "another year"?

Yes, you're right. I should have said for another 5 years.

So, if I buy assets in 2021, they'll be tax free until 2025. Then I can decide to roll them over into my 2026 allowance. Since my 2026 allowance is meant to be for purchasing assets that will stay tax-free until 2031, I assumed that my rollover assets would also behave the same way, staying tax-free until 2031. Is that correct?

Correct.

Also, another question. What happens in 2031? I assume I am not allowed to roll over assets that have already been rolled over before, so I am forced to move them into a taxable account at that point. Is this correct?

No. As far as I understand, there is no rule that prevents re-rolling over. You can roll it over again. What rolling over does is prevents you investing new money the following year by up to the amount you rolled over.

Although by 2025 we will have the New NISA system which is even more complex, with tier 1 and tier 2... but you will still be able to roll over.

[tokyolights]

Also, another question. What happens in 2031? I assume I am not allowed to roll over assets that have already been rolled over before, so I am forced to move them into a taxable account at that point. Is this correct?

No. As far as I understand, there is no rule that prevents re-rolling over. You can roll it over again. What rolling over does is prevents you investing new money the following year by up to the amount you rolled over.

Although by 2025 we will have the New NISA system which is even more complex, with tier 1 and tier 2... but you will still be able to roll over.

The reason why I thought that re-rolling is not positive is the PDF I found here:
https://www.jsda.or.jp/en/activities/re ... s/NISA.pdf
"Thus the scheme offers a total tax-exempt duration of up to 10 years."

If we will get a new system soon anyway then I guess this doesn't matter that much, more than anything I am just asking out of curiosity.

[adamu]

The reason why I thought that re-rolling is not positive is the PDF I found here:
https://www.jsda.or.jp/en/activities/re ... s/NISA.pdf
"Thus the scheme offers a total tax-exempt duration of up to 10 years."

If we will get a new system soon anyway then I guess this doesn't matter that much, more than anything I am just asking out of curiosity.

Yes, that applies to the current NISA scheme that lasts until 2023, but there is already a New NISA scheme lined up for 2024~, which you can roll over into (I think). The RetireJapan write-up is here: NISA Changes.

I'll put it on my weekend todo list to read up about it again and maybe make an attempt to summarise it on the NISA wiki page too.

[bryanc]

setting up the nisa now with monex and stuck on the setting up type of acct i want.
i want to do the tax slip one but not sure whether it should be with receiving dividends or not?
personally prefer just to have it all ploughed back in and thus not getting the dividend right away, or am i misunderstanding this?
源泉徴収あり・配当等の受入あり

it says the above is the simplest for beginners but why is this better for beginners than
源泉徴収あり・配当等の受入なし）?

thanks

[TBS]

setting up the nisa now with monex and stuck on the setting up type of acct i want.
i want to do the tax slip one but not sure whether it should be with receiving dividends or not?
personally prefer just to have it all ploughed back in and thus not getting the dividend right away, or am i misunderstanding this?
源泉徴収あり・配当等の受入あり

it says the above is the simplest for beginners but why is this better for beginners than
源泉徴収あり・配当等の受入なし）?

thanks

This setting relates to how you want Monex to manage the tax reporting on your tokutei kouza with them. The 源泉徴収あり・配当等の受入あり option means they will produce a 損益通算 automatically which offsets dividends received against capital losses when calculating the total loss to carry forward for future years' tax returns (if you have a net loss that tax year). More details here and here.

The setting is unrelated to any investments you make via NISA. With NISA there is no tax and no option to include any losses in a 損益通算.

It is also unrelated to whether dividends from mutual funds will be automatically reinvested. It's another setting for that, called the 再投資コース - more on that here.

[bryanc]

thanks-one more question .being asked if want to set up a monex fxplus account..i presume this has nothing to do with the nisa,but is it worth doing or not?as faras i can see there is no charge for doing so.

[beanhead]

thanks-one more question .being asked if want to set up a monex fxplus account..i presume this has nothing to do with the nisa,but is it worth doing or not?as faras i can see there is no charge for doing so.

It is nothing to do with the NISA, as you said.
A lot of people like to keep some of their cash emergency fund in USD, EUR etc to hedge against currency risks. So setting it up would give you the option of holding some $ or pounds or something in that account.