Inheritance Tax

[thurston1]

Hi all,

I am a little bit confused about this potential situation:

If I was to inherit say 460,000 USD or 51 million yen

(the estate was 220 million yen or 1.85 million USD and divided amongst 4 of us, ne being the the only person required to pay tax in Japan.
How much would I be taxed in such a scenario?
Is there any ways I could reduce the amount of tax such as agreeing to forfeit part of the money?

Regards

[RetireJapan]

Wrote about that last year: https://www.retirejapan.com/blog/japane ... nce-taxes/

[thurston1]

Great article, but I'm still a little confused:

Are my basic calculations correct?

so if the estate was worth 1,800,00 split between 4 people

first I would deduct 30million/ ($270,000)

then another 6 million divided by 4 ($220,000).

this would make the taxable estate $1,310,000
divided by four people $327,000 (amount that is taxable)

Regards

[RetireJapan]

Have to start by saying I am not a lawyer nor an accountant. For an inheritance that size I would definitely recommend talking to one

My understanding is that you would take the inheritance as a whole: 220m yen

and deduct the standard allowance and the legal heir allowances: 54m yen

leaving you with a taxable estate of 176m yen (you could also deduct funeral costs, etc. and there may be additional allowances you can use)

the tax on an estate of 176m yen would be 40% with a deduction of 17m yen, so 40% of 159m yen would be 63.6m in tax. You would owe the proportion of the tax based on your share of the estate.

Assuming a 25% share, the tax owed would be 15.9m yen. As a proportion of a 51m yen inheritance, that is a tax rate of just over 30%.

Definitely talk to a professional though (and let us know what they say!).

[thurston1]

Thanks so much for that. This website is extremely useful and has helped me a lot.

In regards to inheritance tax, I guess the only thing I can say is (it is definitely not in my best interest to get a spousal visa or stay in Japan longer than 10 years.)

If I was to work in Japan as a teacher, is there a age requirement for a work visa? (example: do they stop issuing me a work visa when I turn 60?)

Regards

[captainspoke]

...
If I was to work in Japan as a teacher, is there a age requirement for a work visa? (example: do they stop issuing me a work visa when I turn 60?)
...

That's an interesting question. I do know people locally that are working/teaching after 65, but in my circle, those folks tend to also have PR.

I do know that 60 is the age limit in china. I had toyed with the idea of teaching there for a term or two after retirement, but when I mentioned my age, silence. Even no answers from recruiters.

I'm not sure about other parts of east and SE asia. That might be a question for the TEFL sub on reddit.

[usian]

If I was to inherit say 460,000 USD or 51 million yen

(the estate was 220 million yen or 1.85 million USD and divided amongst 4 of us, ne being the the only person required to pay tax in Japan.
How much would I be taxed in such a scenario?
Is there any ways I could reduce the amount of tax such as agreeing to forfeit part of the money?

This is a super old question so you may have already found the answer.

I recently tried to file my inheritance tax forms for my portion of an inherited overseas estate and was told no taxes were due and it was not necessary to report anything to the tax office.

Anyway, your portion is the only part that will have the standard deductions subtracted (not sure what they're called) - because you are the only tax resident of Japan and the assets are located outside Japan.

Please check my figures, but basically 30 million yen and then 6 million x 4 (in your case). So 54 million yen will be deducted from your own share, which you say is 51 million (couldn't quite follow your calculation).

This is below zero, so no taxes in Japan. As mentioned you don't even have to report it, though you probably should keep all the paperwork in case you are asked about it in the future.