Gift money and taxes

[Bubblegun]

That's great to know.
I wonder how this will turn out when I bring my savings over from the UK.
I hope I can get a helpful tax man when I go to chat to them.

[Tkydon]

That's great to know.
I wonder how this will turn out when I bring my savings over from the UK.
I hope I can get a helpful tax man when I go to chat to them.

Your savings are not a Gift, and therefore are not subject to Gift Tax.

Transferring money does not in itself constitute a taxable event.

If you are not a Permanent Resident for Tax Purposes (less than 5 years in the last 10 years in country), and if you didn't make any overseas income / gain in the year in which you bring the funds over, then the money can be remitted Tax Free.
If you did make overseas income in the year in which you bring the funds over, then you will be liable for tax on the overseas income / gain in the tax year in which the funds are remitted and not on the full amount of the remittance.

If you are a Permanent Resident for Tax Purposes (more than 5 years in the last 10 years in country), all overseas income / gain is liable to Japanese taxes whether you remit the money to Japan or not. Having paid the taxes on the income / gains, your savings can be remitted Tax Free.

[Bubblegun]

That's great to know.
I wonder how this will turn out when I bring my savings over from the UK.
I hope I can get a helpful tax man when I go to chat to them.

Your savings are not a Gift, and therefore are not subject to Gift Tax.

Transferring money does not in itself constitute a taxable event.

If you are not a Permanent Resident for Tax Purposes (less than 5 years in the last 10 years in country), and if you didn't make any overseas income / gain in the year in which you bring the funds over, then the money can be remitted Tax Free.
If you did make overseas income in the year in which you bring the funds over, then you will be liable for tax on the overseas income / gain in the tax year in which the funds are remitted and not on the full amount of the remittance.

If you are a Permanent Resident for Tax Purposes (more than 5 years in the last 10 years in country), all overseas income / gain is liable to Japanese taxes whether you remit the money to Japan or not. Having paid the taxes on the income / gains, your savings can be remitted Tax Free.

Hopefully.
Well, all I know is I've been saving 75 pounds every month for 25 years, into my live insurance/endowment. Thankfully I survived.
I'm sure the tax man will ask but so long as I explain ill be ok.Although it is complicated when discussing these saving vehicles.

[Tkydon]

Well, all I know is I've been saving 75 pounds every month for 25 years, into my live insurance/endowment. Thankfully I survived.
I'm sure the tax man will ask but so long as I explain ill be ok.Although it is complicated when discussing these saving vehicles.

When you said your savings, I thought you meant your cash sitting in the bank.

When you receive the payout from the endowment, that is a taxable event. You will be liable for Capital Gains Tax on the amount you receive over the the amount you paid in over the 25 years.

You will need to convert every 75 pounds contribution to Yen at the TTB exchange rate on the day of each contribution, and the Payout amount at the TTS exchange rate on the day you receive it.

Your gain is then the Yen Payout amount minus the sum of the amounts for the Yen Contributions minus any Transaction costs and Wire Transfer Fee.
You then have to pay Capital Gains Tax on the gain at 20.315% (15% National, 0.315% Reconstruction, and 5% Residents' Taxes).
You will not be taxed in the UK, so there will be no Foreign Tax Credit.

[Bubblegun]

Well, all I know is I've been saving 75 pounds every month for 25 years, into my live insurance/endowment. Thankfully I survived.
I'm sure the tax man will ask but so long as I explain ill be ok.Although it is complicated when discussing these saving vehicles.

When you said your savings, I thought you meant your cash sitting in the bank.

When you receive the payout from the endowment, that is a taxable event. You will be liable for Capital Gains Tax on the amount you receive over the the amount you paid in over the 25 years.

You will need to convert every 75 pounds contribution to Yen at the TTB exchange rate on the day of each contribution, and the Payout amount at the TTS exchange rate on the day you receive it.

Your gain is then the Yen Payout amount minus the sum of the amounts for the Yen Contributions minus any Transaction costs and Wire Transfer Fee.
You then have to pay Capital Gains Tax on the gain at 20.315% (15% National, 0.315% Reconstruction, and 5% Residents' Taxes).
You will not be taxed in the UK, so there will be no Foreign Tax Credit.

Now that's a bummer, because the money was paid from my UK bank account as a direct debit cause I never sent any money to pay for it. Maybe a couple of times. Plus who keeps all those records for 20 years.
I guess they really want to punish people who save. Of course there was never to be any UK tax to be payed on maturity as it was tax free anyway.
Japan really can suck sometimes.LOL

[Tkydon]

Now that's a bummer, because the money was paid from my UK bank account as a direct debit cause I never sent any money to pay for it. Maybe a couple of times. Plus who keeps all those records for 20 years.
I guess they really want to punish people who save. Of course there was never to be any UK tax to be payed on maturity as it was tax free anyway.
Japan really can suck sometimes.LOL

How long have you been in Japan?

If less than 5 years (in the last 10) when you receive the money in the UK, then leave the money in the bank in the UK until the next tax year.
You would not have to pay tax on it if you have not been in Japan for more than 5 years (in the last 10).
It then becomes you bank savings.
The next Tax Year, January remit it to Japan. You are just remitting your savings. There is no income event in the same Tax Year, and so you can send the money Tax Free... BUT this only works if you have not been in Japan for more than 5 years (in the last 10) in the year when you receive the money in the UK...

If you have been in Japan for more than 5 years (in the last 10) in the year when you receive the money in the UK, then it is taxable in Japan, whether you remit it to Japan or not.

[Bubblegun]

Now that's a bummer, because the money was paid from my UK bank account as a direct debit cause I never sent any money to pay for it. Maybe a couple of times. Plus who keeps all those records for 20 years.
I guess they really want to punish people who save. Of course there was never to be any UK tax to be payed on maturity as it was tax free anyway.
Japan really can suck sometimes.LOL

How long have you been in Japan?

If less than 5 years (in the last 10) when you receive the money in the UK, then leave the money in the bank in the UK until the next tax year.
You would not have to pay tax on it if you have not been in Japan for more than 5 years (in the last 10).
It then becomes you bank savings.
The next Tax Year, January remit it to Japan. You are just remitting your savings. There is no income event in the same Tax Year, and so you can send the money Tax Free... BUT this only works if you have not been in Japan for more than 5 years (in the last 10) in the year when you receive the money in the UK...

If you have been in Japan for more than 5 years (in the last 10) in the year when you receive the money in the UK, then it is taxable in Japan, whether you remit it to Japan or not.

OK thanks for that. I've been here 20 years now. I'll go and chat to the tax office with the wife. My biggest worry is that they decide to actually nullify any benefits. On top of that there is the sum of money I got from an inheritance.Not much. but who knows what happens once you try to explain everything to the TAX MAN.

[Tkydon]

OK thanks for that. I've been here 20 years now. I'll go and chat to the tax office with the wife. My biggest worry is that they decide to actually nullify any benefits. On top of that there is the sum of money I got from an inheritance.Not much. but who knows what happens once you try to explain everything to the TAX MAN.

So, the Income from the Endowment will be taxable, whether you remit it to Japan or not.

Tax on Inheritance depends on several factors:
How Much in Yen? In what form?
Who did you inherit it from? Parent or Grand Parent? Family? Unrelated person?
When? This Tax Year? Last Tax Year?
etc..

The Inheritance will be taxable, whether you remit it to Japan or not.

[Bubblegun]

OK thanks for that. I've been here 20 years now. I'll go and chat to the tax office with the wife. My biggest worry is that they decide to actually nullify any benefits. On top of that there is the sum of money I got from an inheritance.Not much. but who knows what happens once you try to explain everything to the TAX MAN.

So, the Income from the Endowment will be taxable, whether you remit it to Japan or not.

Tax on Inheritance depends on several factors:
How Much in Yen? In what form?
Who did you inherit it from? Parent or Grand Parent? Family? Unrelated person?
When? This Tax Year? Last Tax Year?
etc..

The Inheritance will be taxable, whether you remit it to Japan or not.

Wow. 400,000 thousand yen each from mum, 6 years ago and they still want to tax it.I guess the best way is to pay, and jam it all into NISA etc claw back some gains and then buy the house. ( when we find one). And show unused my money to pay for The mortgage back home.
I’m not sure whose the better tax man. The Japan government or the grim reaper .

[Beaglehound]

OK thanks for that. I've been here 20 years now. I'll go and chat to the tax office with the wife. My biggest worry is that they decide to actually nullify any benefits. On top of that there is the sum of money I got from an inheritance.Not much. but who knows what happens once you try to explain everything to the TAX MAN.

So, the Income from the Endowment will be taxable, whether you remit it to Japan or not.

Tax on Inheritance depends on several factors:
How Much in Yen? In what form?
Who did you inherit it from? Parent or Grand Parent? Family? Unrelated person?
When? This Tax Year? Last Tax Year?
etc..

The Inheritance will be taxable, whether you remit it to Japan or not.

Wow. 400,000 thousand yen each from mum, 6 years ago and they still want to tax it.I guess the best way is to pay, and jam it all into NISA etc claw back some gains and then buy the house. ( when we find one)
I’m not sure whose the better tax man. The Japan government or the grim reaper .

That sum is well below the inheritance tax threshold, you won’t be on the hook for anything there. The endowment is more problematic; as you say, best to go and ask how to deal with it at the tax office. If you don’t have bank statements showing the exact payment dates, it may well be acceptable to assume your contributions were paid (for example) on the first of each month and use historical exchange rates to arrive at a notional yen figure. Pain in the proverbial, yes, but manageable in a few hours at most.