Investing for my children

[novalis]

Hi everyone, I have a question about starting up some kind of fund for my children. I am thinking of setting something up for each of my children in their own name. I would transfer funds for this on a monthly basis to make the regular investment payments on their behalf. Can anyone suggest ways forward for this? Are NISAs the best method? Anything else I could consider instead of NISA? I'm recently retired and I'm trying to get something set up for my kids' futures. Any suggestions or pointers would be gratefully received.

[beanhead]

Start with junior NISA for 2022 and 2023.
Max of 800,000 yen per year per child.
This will create a regular brokerage account for them, so any money beyond this, or after 2023, can be invested there.
Maximum tax-free gift is 1.1million yen per child per year.

[mighty58]

Agreed with Beanhead, and keep in mind that, with the usual gaijin name issues and other documentation you need to provide, it could take upwards of two months to get your kids accounts up and running (and remember you also need banking accounts in their names which the money must pass through, and these must be identical to the names in their securities accounts). So if you want to take advantage of the 2022 allocation, get started with applying now.

[RetireJapan]

As OP mentions being retired, if these are adult children, the best option might be to have them open tsumitate NISA accounts and give them the money to invest (or pay for their living expenses, and then they can invest their own money).

[Haystack]

J-Nisa, as everyone else has said. Get on it Quick. Set-up the bank account, and apply asap. Yucho is easiest minors don't forget your koseki.

After 2022-2023 there will be no other tax-free allocation for under 18s. However, if they receive cash gifts from family you can invest in their taxable accounts.

Ignore education insurance, bs products with high fees.

I went 100% Emaxis Slim All Country.

My brother bought him some VT as a gift.

He received around 1000+ Rakuten points for his holdings so I bought him some Emaxis Slim S&P500. (The world's smallest us tilt).

Note: Are they US person's/Green card holders?

[beanhead]

As OP mentions being retired, if these are adult children, the best option might be to have them open tsumitate NISA accounts and give them the money to invest (or pay for their living expenses, and then they can invest their own money).

Ah!
If adult Japanese readers, then buy them this book:
税金がタダになる、おトクな 「つみたてNISA」「一般NISA」活用入門

If they only read English, perhaps the RJ NISA guide

That would be my first step before giving them money if they are over 20.
Teach a man to fish, and all that...

[RetireJapan]

Ah!
If adult Japanese readers, then buy them this book:
税金がタダになる、おトクな 「つみたてNISA」「一般NISA」活用入門

If they only read English, perhaps the RJ NISA guide

That would be my first step before giving them money if they are over 20.
Teach a man to fish, and all that...

My plan is to match any investments my grandkids make once they start earning (as long as they leave the investments there for the long term). This will include lots of discussion too, of course

[Deep Blue]

Ah!
If adult Japanese readers, then buy them this book:
税金がタダになる、おトクな 「つみたてNISA」「一般NISA」活用入門

If they only read English, perhaps the RJ NISA guide

That would be my first step before giving them money if they are over 20.
Teach a man to fish, and all that...

My plan is to match any investments my grandkids make once they start earning (as long as they leave the investments there for the long term). This will include lots of discussion too, of course

This is a nice idea, I like it a lot. I might fund them a certain amount a year - maybe 100,000 yen and then match other contributions - the same way my employer incentivizes me to save more into my pension!

We have not yet set up any bank accounts or investment accounts for our children but it is on the "to-do" list. Maybe after the summer.

[RetireJapan]

We have not yet set up any bank accounts or investment accounts for our children but it is on the "to-do" list. Maybe after the summer.

I would recommend checking out Junior NISA, assuming your kids don't have US citizenship. It ends in December 2023, so you can still get up to two years of contributions and then they will have an investment account in their names which you can use normally from 2024.

[Deep Blue]

We have not yet set up any bank accounts or investment accounts for our children but it is on the "to-do" list. Maybe after the summer.

I would recommend checking out Junior NISA, assuming your kids don't have US citizenship. It ends in December 2023, so you can still get up to two years of contributions and then they will have an investment account in their names which you can use normally from 2024.

Thanks. It seems like that is an ok option if we choose to tie the money up in Japan. But won't CGT apply when they come to cash these investments in, 10, 20 or 30 years down the line? I would expect substantial capital growth by then (assuming 5% average annual investment returns) and then they'll be hit by 20% CGT?

Are accumulation investment vehicles a thing here? A class that automatically invests dividend income back into more units rather than paying out? And if they exist, do they avoid dividend tax?