Navigating Inheritance as a Japan Resident: Seeking Advice

[shadows]

It sounds like you are going to inherit less than the tax-free amount (30m + 6m*3(4?) statuatory heirs) so you don't need to do anything with regards to Japanese taxes.

Hi Ben thanks for the reply, *3. Perhaps you're correct however since my numbers given above are just an estimate I'm just trying to get ahead of the situation. It may or may not be below the inheritance tax threshold. I'm just trying to get ahead of the situation for the not to distant future and share my situation on your cool blog.

[captainspoke]

... Or perhaps even try to set up a trust of sorts to help structure the inheritance in a way to reduce tax burdens. ...

Trusts are not used here. They are sometimes referred to as being 'transparent' to the NTA, which 'sees thru' the trust. As an example, if someone does have a trust that is structured so that money is distributed on a later date (or dates)**, the NTA here sees the beneficiary/ies of the trust as having received the full amount immediately.

**a case might be where a child or children would receive certain portions of money from a trust on certain birthdays--on turning 25, 30, and so on.

[Beaglehound]

It sounds like you are going to inherit less than the tax-free amount (30m + 6m*3(4?) statuatory heirs) so you don't need to do anything with regards to Japanese taxes.

Hi Ben thanks for the reply, *3. Perhaps you're correct however since my numbers given above are just an estimate I'm just trying to get ahead of the situation. It may or may not be below the inheritance tax threshold. I'm just trying to get ahead of the situation for the not to distant future and share my situation on your cool blog.

From the estimates given, you have a fair bit of wiggle room since your allowance will be 48m yen (30m basic plus 6m x 3 for three statutory heirs). And even if it's a bit over that, you don't get taxed on the full whack, just the part over 48m. In a way the vagaries of the inheritance tax system very much work in your favour here, giving you in effect the full estate allowance on a one third share.

[RetireJapan]

Hi Ben thanks for the reply, *3. Perhaps you're correct however since my numbers given above are just an estimate I'm just trying to get ahead of the situation. It may or may not be below the inheritance tax threshold. I'm just trying to get ahead of the situation for the not to distant future and share my situation on your cool blog.

I guess I mean that either you are under the tax free amount and don't have to do anything, or over it and need to submit a tax return/pay what you owe.

There are no technical workarounds that allow you to avoid paying tax.

[shadows]

... Or perhaps even try to set up a trust of sorts to help structure the inheritance in a way to reduce tax burdens. ...

Trusts are not used here. They are sometimes referred to as being 'transparent' to the NTA, which 'sees thru' the trust. As an example, if someone does have a trust that is structured so that money is distributed on a later date (or dates)**, the NTA here sees the beneficiary/ies of the trust as having received the full amount immediately.

**a case might be where a child or children would receive certain portions of money from a trust on certain birthdays--on turning 25, 30, and so on.

Thanks for sharing captainspoke. So trusts are too transparent, eh!? Perhaps insurance policies of sorts can help reduce or eliminate Jpn inheritance taxes? Or perhaps just bite the bullet here and follow the death and taxes are inevitable.

[shadows]

Hi Ben thanks for the reply, *3. Perhaps you're correct however since my numbers given above are just an estimate I'm just trying to get ahead of the situation. It may or may not be below the inheritance tax threshold. I'm just trying to get ahead of the situation for the not to distant future and share my situation on your cool blog.

I guess I mean that either you are under the tax free amount and don't have to do anything, or over it and need to submit a tax return/pay what you owe.

There are no technical workarounds that allow you to avoid paying tax.

Thanks Ben, yeah it appears that way. everyone's comments help me clarify what I probably already knew. If anyone knows of a good J tax accountant I'd be grateful.

[beanhead]

Thanks beanhead, I now see your valid point. The source of the funds whether domestic or foreign is not the determining factor for Jpn inheritance tax. So, what matters is that me as a resident of Jpn, am receiving and benefiting from the inheritance within Jpn, correct? So basically having an offshore account might not be enough to avoid Jpn inheritance tax. Jpn tax laws sucks. Having 4 kids here in Japan perhaps there's a Jpn gift tax reg. that can vary from inheritance tax? Or perhaps even try to set up a trust of sorts to help structure the inheritance in a way to reduce tax burdens. Anyone know a good Jpn tax accountant in Osaka?

It may not be as bad as you think.
As RJ wrote, you seem to be under the Basic Exclusion:

Section 2.3

https://heritagelaw.jp/wp-content/theme ... _Japan.pdf

(just realized there is a page 2 to this thread. So a bit late here, but anyway)