Tax impacts/limits on receiving a gift/loan from overseas?

[RetroNewbie]

I'm going to do a training course here in Japan, and I'm being helped out with the initial cost by relatives overseas.

They will transfer about 1M yen which I will almost immediately pay to the training company. It's a personal loan, so I am intending to pay it back, but at very low interest and with very flexible repayment dates.

I know in the UK that there is a limit of about 7000gbp per year for gifts before you start getting taxed, though I think making it a loan avoids that.

Is there any similar limit to be aware of in Japan? Are there any retirements for it to be classified as a loan?
Would I just declare it on next year's tax form as income, and then also as an expense? Or would loans be declared differently?

Thanks for any info!

[RetireJapan]

You can receive up to 1.1m yen per year in gifts before needing to declare or pay gift tax.

[RetroNewbie]

We got some money from overseas in Jan to help out with the coronavirus situation, so I think that's going to push this new stuff over a 1.1M limit.

Assuming the 1.1M Tax Free gift allowance doesn't apply, is the Gift Tax going to be at a high rate? Or could we declare it as income (kind of like the 1M support money from the government last year)?

Any idea how Loans are treated for things like tax? If we structure it as a loan, would that then put it outside things like gift or income tax?

[RetireJapan]

Gift tax: https://www.nta.go.jp/english/taxes/others/02/15002.htm
Calculator: http://www.asahi-net.or.jp/~zi3h-kwrz/lawygiftcal.html

[Beaglehound]

Gift tax is at an initial 10% after the 1.1 million, and kicks up after that depending on amount. To be avoided if at all possible.

This calculator is old but still valid I think

http://www.asahi-net.or.jp/~zi3h-kwrz/lawygiftcal.html

I have no experience of taking a loan from a family member, but intuitively, as it is a loan not a gift and you intend to repay it, I don’t see that you would need to declare it as a gift. What the tax authorities would expect you to do, I don’t know but this lovely document may have some answers:

https://www.nta.go.jp/english/taxes/ind ... 020/01.pdf

Alternatively some other forum member will hopefully have done something similar and will be along soon...

[Beaglehound]

Damn you site owner!

[beanhead]

Damn you site owner!

Haha. You type too slowly...or Google for the sites slower than him?

[RetireJapan]

I have a big advantage: I approve new posts, then can respond almost immediately