foreign cash. UK and Japan.

[RetireJapan]

Yes, the OECD treaty was made to combat tax evasion.

[Bubblegun]

Eg limits on cash being brought in.

Moving money is not a taxable event as long as you are not permanently tax resident (have been here for more than five of the last ten years). If you are permanently tax resident, you may be liable to pay tax whether you move the money or not. After figuring that out and paying any taxes owed, you can move as much money as you like without paying further taxes.

If you are not permanently tax resident, you may not owe taxes on the money. In that case, leave it in the UK until the following tax year, when you can move it without any consequences.

However, at the end of the day you need to consult with a tax accountant or the tax office to figure out how your situation will be treated under Japanese law. And let us know what you find out, because that may be useful for others too

That was my next step. Although I’m sure it’ll open up a while can of worms of not knowing.
Just out of curiosity, is an endowment mortgage something other countries have had?

For those that didn’t know it also had a life insurance element, and what makes this even more complicated was the mis-selling. It meant I converted my mortgage to valiant repayment. So
Normally this would pay of the mortgage, tax free. But now I’m left with the cash.

I would assume any tax due would be based on the profits/bonus. Surely not the initial savings.

Anyway I’ll have to search for an accountant that can understand English.
If I get an answer I’ll post for others to use.

[Bubblegun]

This is an update to clarify a question many of us have had about transferring money to Japan. So I have consulted with a Japanese accountant about bringing a large amount of money to Japan especially in regards to tax and what I can / should do.

So here is what he said

So long as it is from “my” account in the UK to “my”own account in Japan, he said there is no problem regarding taxes.
I again checked with him, that this is an endowment and again he said there are no tax payments on the Japan side, unless there is something on the UK side. He reassured me there have never been any problems.

This seems to match a few people I know who live and work here in Japan, but are actually working remotely in Japan with Europe and North American companies.
They bring their salary over in one massive chunk once a year. They assured me they have never had to pay any Japanese taxes apart from pension .

I hope that clarifies some of our questions, but I can only report what the accountant said and act on his advice.

[Beaglehound]

I have no idea about the tax treatment of an endowment but my interpretation of the rules is that any salary gained from performing work in Japan is income subject to Japanese taxation, regardless of where it is paid. I do some Skype teaching from here with students in the UK who pay into my UK bank account but I still declare it here as the rules suggest it is work performed in Japan so counts as domestic source income.

I might be overly cautious in that interpretation, but even if it were foreign source income I can’t see how a permanent tax resident avoids Japanese taxation on it, unless they declare nothing and don’t get caught. Appreciate you are just passing on information, not having a go at you Bubblegun.

[RetireJapan]

Yeah, there has never been a problem with moving cash, provided all taxes have been taken care of.

The problem is that moving cash alerts the tax office to the existence of the money, so if taxes have not been declared and paid there could be a problem.

I know a few people who were invited to the tax office to explain the provenance of their money.

[Bubblegun]

Yeah, there has never been a problem with moving cash, provided all taxes have been taken care of.

The problem is that moving cash alerts the tax office to the existence of the money, so if taxes have not been declared and paid there could be a problem.

I know a few people who were invited to the tax office to explain the provenance of their money.

Well so long as my taxes are taken care of, and everything is above board, I’ll be happy, to explain it to any office.
He said, so long as I have payed my taxes in the uk it shouldn’t be a problem.
However, to make sure everything is ok I’ll chat to another consultant just to double check.
He said if there are any tax problems they’ll be on the UK side.
Just out of curiosity, the people invited to the tax office in Japan because of large transfers....
What was their situation and outcomes?
Might be helpful.

[Bubblegun]

I have no idea about the tax treatment of an endowment but my interpretation of the rules is that any salary gained from performing work in Japan is income subject to Japanese taxation, regardless of where it is paid. I do some Skype teaching from here with students in the UK who pay into my UK bank account but I still declare it here as the rules suggest it is work performed in Japan so counts as domestic source income.

I might be overly cautious in that interpretation, but even if it were foreign source income I can’t see how a permanent tax resident avoids Japanese taxation on it, unless they declare nothing and don’t get caught. Appreciate you are just passing on information, not having a go at you Bubblegun.

Oh I don’t think they are completely exempt from all taxes. I don’t think they’re double taxes on income tax. The certainly payed their city tax here in Japan, health care tax, and pension.
But I do know they always did everything above board and legitimate.
How does your UK income taxed? Is it taxed and declared in the UK too?
Btw no worries, I can only pass on the communication I got from the accountant.
The last thing I want is to fall fowl of the tax man.
It’s hard enough dealing with HMRC and the computer verification problem without the language headache here in Japan.

[RetireJapan]

Just out of curiosity, the people invited to the tax office in Japan because of large transfers....
What was their situation and outcomes?
Might be helpful.

One was actually moving cash savings, and able to prove it. The others ended up being audited, and had an unpleasant six months.

[Bubblegun]

Just out of curiosity, the people invited to the tax office in Japan because of large transfers....
What was their situation and outcomes?
Might be helpful.

One was actually moving cash savings, and able to prove it. The others ended up being audited, and had an unpleasant six months.

Ouch! 6 months is a long time. Were their savings subject to increased taxes here in Japan?
Thankfully I will have all the letters, paperwork for the past 25 years to show its savings.

I did come across this though and I hope I am reading it correctly as section 3-8 seems to show clearly what we should be declaring.

The amount is nowhere near those figures, would be nice, but no way am I that rich. LoL
To be clear I’m also going to visit the tax office too and get it from the horses mouth.

Hopefully this doc will be helpful to us.
Clear as mud, but helpful nonetheless.
I’ll update as I get more information.
https://www.nta.go.jp/english/taxes/ind ... 020/01.pdf

[RetireJapan]

An audit here (like in most countries I suspect) is just a never ending series of requests for more information and documents. If someone is found to have underpaid or not reported taxable income etc. they will have to pay the tax they owe and a penalty. In serious cases they can also be prosecuted. Not fun.

My wife has been audited twice (she runs a small business and moving tax offices seems to attract attention). Not fun at all.