Rolling over to new NISA with large amounts

[sutebayashi]

I gather things can get complicated here, because the tax agency may deem that the money is really still yours, if you remain in control of it. (A 名義預金)

Any more info on that?

I typically see it mentioned in the inheritance tax context, but gift tax is related so I would assume it can be relevant there also.

The basic gist is that, say you put some money in an account in someone else’s name, like your kid’s.

If you are the one who effectively controls the account, and spend money from it, etc, and your kid doesn’t have anything to do with it, the tax people could deem the money is actually yours.

I am not planning on spending my kids Junior NISA account money myself, to avoid such appearance such as I was using the Junior nisa to avoid some tax.

[beanhead]

I am not planning on spending my kids Junior NISA account money myself, to avoid such appearance such as I was using the Junior nisa to avoid some tax.

Presumably education fees are fine, but does that mean they should be paid directly from an account in the child's name to avoid any potential issues?

[Gulliver]

I am not planning on spending my kids Junior NISA account money myself, to avoid such appearance such as I was using the Junior nisa to avoid some tax.

Presumably education fees are fine, but does that mean they should be paid directly from an account in the child's name to avoid any potential issues?

If we’re talking about university, you’ll probably need at least 1.2 million a year just to feed an house a student. So the gift limit would seem unrealistic.

There is, however, an exemption to the gift tax:

(Inheritance Tax Law Article 21-Paragraph 3

(2) Gifts between persons who have a legal responsibility to support each other, for the purpose of support or livelihood.)

Unfortunately, the way they wrote the law leaves a lot of wiggle room.

Since most children in university are adults, do you still have a legal responsibility to support them? Is sending them to university necessary for their livelihood?

I guess the best you can hope for is an “understanding” auditor.

@Tkydon, will hopefully correct me if I’m wrong.

[Tkydon]

I am not planning on spending my kids Junior NISA account money myself, to avoid such appearance such as I was using the Junior nisa to avoid some tax.

Presumably education fees are fine, but does that mean they should be paid directly from an account in the child's name to avoid any potential issues?

If we’re talking about university, you’ll probably need at least 1.2 million a year just to feed an house a student. So the gift limit would seem unrealistic.

There is, however, an exemption to the gift tax:

(Inheritance Tax Law Article 21-Paragraph 3

(2) Gifts between persons who have a legal responsibility to support each other, for the purpose of support or livelihood.)

Unfortunately, the way they wrote the law leaves a lot of wiggle room.

Since most children in university are adults, do you still have a legal responsibility to support them? Is sending them to university necessary for their livelihood?

I guess the best you can hope for is an “understanding” auditor.

@Tkydon, will hopefully correct me if I’m wrong.

You get an increased Dependent Tax Allowance for dependents between 19 and 23, which suggests that University Students at Undergrad are still considered to be your legal responsibility.