NISA after 5 years

[Akatani]

You're throwing away 10 months of tax free capital gains though...

[RetireJapan]

Only if it isn't extra money

If it is, you can only get your NISA allowance for each year that year. After that it is gone.

So in our hypothetical situation:

2017 allowance: used or not used
2018 allowance: used
2019 allowance: used

The only reason not to use the 2017 allowance would be if you needed that money to put into your 2018 allowance.

[Akatani]

ok, then what about your 2022 allowance?

2017 2 months
2018 12 months
2019 12 months
2020 12 months
2021 12 months
total: 50 months tax free

or
2018 12 months
2019 12 months
2020 12 months
2021 12 months
2022 12 months
total: 60 months tax free

[RetireJapan]

That's not how it works though. Each year is tax-free for five years.

So,

Jan 2017 - Dec 2021 (1.2m)
Jan 2018 - Dec 2022 (1.2m)
Jan 2019 - Dec 2023 (1.2m)
Jan 2020 - Dec 2024 (1.2m)
Jan 2021 - Dec 2025 (1.2m)

etc.

Putting money in this year doesn't affect any of the other years, unless you only have a limited amount of money.

Then next year we also have the option of choosing the new long-term NISA.

[Akatani]

Crap, just when I thought I had a handle on it.

But, it's not endless though right? You can't keep investing 1.2 mill til you retire.

[RetireJapan]

Right now there are two limits:

1. the five year limit (after that your stocks etc. go into your ordinary account or you can roll 1.2m of them into a new NISA year)
2. the NISA law expires after the next 5-year period (I think)

In the UK ISAs are unlimited. I hope Japan will go that way too. Also I expect they will renew the NISA law (or make something similar).

Time will tell

[Kiyora999]

Hi everyone, thank you very much for all your answers, it was very helpful!
I'm sorry for the delay, I didn't brought my PC in business trip and couldn't remember my password!

I think I'll do as Akatani suggests and wait to have the registrations open for 2018 before opening an account!
I don't have the 1,2 million right now, but I'll have them by the beginning of 2018, so it'll be invested better that way I think.

Then I'll try to invest 2M/year on Interactive Brokers since I don't like robo-advisors.

[goodandbadjapan]

I get that you have to move stuff out after 5 years, so, for example your 2018 NISA will have to come out of Nisa in 2023. But can you put 1.2 million a year in a new NISA every year for evermore as long as you keep moving the funds from each year out when they reach the five year limit. So if you move the 2018 stuff out of NISA in 2023, can you open a new NISA in 2023 'which will again only be tax free for 5 years? In other words tax sheltering is only for five years but but putting 1.2 million a year into a new NISA account every year is possible as long as no account remains for longer than 5 years. If that makes sense!

[RetireJapan]

I get that you have to move stuff out after 5 years, so, for example your 2018 NISA will have to come out of Nisa in 2023. But can you put 1.2 million a year in a new NISA every year for evermore as long as you keep moving the funds from each year out when they reach the five year limit. So if you move the 2018 stuff out of NISA in 2023, can you open a new NISA in 2023 'which will again only be tax free for 5 years? In other words tax sheltering is only for five years but but putting 1.2 million a year into a new NISA account every year is possible as long as no account remains for longer than 5 years. If that makes sense!

The current NISA law only runs for another six years (until Dec 31 H35). So it is possible that it will expire and not be replaced. I get the feeling they will extend it though, or replace it with something similar:

https://www.nta.go.jp/shiraberu/ippanjo ... _10per.pdf

[deepdishj]

It may be a moot point by now, but the deadline for opening a 2017 NISA account is the end of this month.