Assets in UK and Japan writing a will

[concerned]

Hi All
I reside in Japan, plan on staying here, however have a property in the UK. I assume I should have wills for both countries.
Just wondering if anyone else is in a similar situation and if they could recommend a UK solicitor for the UK will?
Thanks

[Wales4rugbyWC23]

Hi All
I reside in Japan, plan on staying here, however have a property in the UK. I assume I should have wills for both countries.
Just wondering if anyone else is in a similar situation and if they could recommend a UK solicitor for the UK will?
Thanks

I have a will in the UK for assets in the UK I don't have a will in Japan. I got it written at my Dad's old for firm for free.

[concerned]

Hi All
I reside in Japan, plan on staying here, however have a property in the UK. I assume I should have wills for both countries.
Just wondering if anyone else is in a similar situation and if they could recommend a UK solicitor for the UK will?
Thanks

I have a will in the UK for assets in the UK I don't have a will in Japan. I got it written at my Dad's old for firm for free.

Thanks! for the reply, yep will do the same myself have a will in the UK for assets there. Will probably skip the formal will in Japan due to the hassle, and will hand write one for here.

[TokyoSurvivor]

This is an issue I suspect a lot of people need to deal with.

It's not just the legal aspect of passing it on. Make sure you're up on all the taxes (IHT and CGT) that could be due if you leave it to someone here in Japan, especially if they sell it. For example, if you inherited the property from your parents, the amount of CGT is massively different between the UK and Japan.

- In the UK, it would be any gain on it's value since inheritance.
- In Japan, it's any gain since the property was originally purchased (possibly back in the 1970's for example).

As you can appreciate it can be a huge difference.

So be very careful when selling any inherited homes as it's not just the IHT you could end up paying.

[captainspoke]

...For example, if you inherited the property from your parents, the amount of CGT is massively different between the UK and Japan.

...
- In Japan, it's any gain since the property was originally purchased (possibly back in the 1970's for example).
...

But if the property (or stock, or whatever) has an acquisition date in the 70s, depending on exactly when that could be a huge advantage. Eg, in 1971, it was still over ¥300 to the dollar.

So while there would be CGT, it would be far better than if it had been acquired when the yen was under ¥100 to the dollar.

[northSaver]

But if the property (or stock, or whatever) has an acquisition date in the 70s, depending on exactly when that could be a huge advantage. Eg, in 1971, it was still over ¥300 to the dollar.

Interesting point! The GBP.JPY rate was over 700 in 1975

I wonder how the calculation is made though? If it's selling price minus purchase price in GBP and converted at today's exchange rate then it doesn't help much. If it's selling price in JPY minus purchase price in JPY then it will help a bit, but not that much unfortunately. The average house price in the UK in 1975 was just under £10,000, now it's £288,000. So you'll still face a whopping CGT bill, no matter what.

[captainspoke]

Sure, still those gains to pay taxes on, but just trying to see a positive angle.

Cost used in calculating the gain would be the price on acquisition, converted to yen on that date (not today's rate), so perhaps the older the acquisition, the better.

[TokyoSurvivor]

Sure, still those gains to pay taxes on, but just trying to see a positive angle.

Cost used in calculating the gain would be the price on acquisition, converted to yen on that date (not today's rate), so perhaps the older the acquisition, the better.

Yes, and this is pretty much the example I'm looking at.

Inherited a house bought in the early 1980's. Looking to sell it, but living here in Japan makes that a very bad idea.
I am considering whether it would be worth moving back to the UK, cutting financial ties with Japan and living in the house as main residence before selling it.

The big question is, what would need to be done to convince the Japanese Tax Man that they are not entitled to their big juicy cut?
Not surprisingly it's not information that is easy to gather.

[northSaver]

The big question is, what would need to be done to convince the Japanese Tax Man that they are not entitled to their big juicy cut?
Not surprisingly it's not information that is easy to gather.

Yes, I'd be very interested to see how people have handled this situation. As far as I remember I've only read speculation about what is supposed to happen and not what actually happened in regards to CGT on an inherited foreign property. I wonder if there is any legal way to avoid it? Advice in the past had suggested that a specialist tax consultant should be enlisted to help prepare the documents and so on.

Someone here suggested that CGT wouldn't be payable if the property were sold during probate and the inheritors received cash instead of the property. I don't know if he/she knows that for a fact or it's just wishful thinking. My view is that UK CGT would still be paid in that situation, so why not Japan CGT?

There is a 3000 万(I think) deduction that can be applied in Japan to houses of a certain age to help reduce CGT but not sure how this would work with foreign property, especially if vital documents are missing.

I'm not against paying tax in Japan of course, but this CGT calculation is extreme and would result in a HUGE tax bill, meaning that I would receive much less inheritance than my siblings in the UK.

[captainspoke]

...
I'm not against paying tax in Japan of course, but this CGT calculation is extreme and would result in a HUGE tax bill, meaning that I would receive much less inheritance than my siblings in the UK.

One note is that the wiki here talks about inheritance--excellent to have as a reference point. (and that's the main page, inheritance tax is in the second block on the left)

One benefit to the way it works here is that the japan-residing inheritor gets all the deduction(s). So if a person has a couple siblings residing abroad, the deductions would be ¥30m, plus ¥6m for each statutory heir, x3 in this case, so ¥48m would be tax free, for the japan residing inheritor. (If all were in japan, the case for most Japanese families, the deduction would be shared among them, and so this seems like a gift to foreigners here who don't have other family members in country)

Another thing I've read of for here is that the inheritance is deemed to be received by the inheritor(s) on the date of death, not some later date after probate is completed. This may mean, depending on how it unfolds and the calendar tax years passing by, that an inheritor will have to file an amended tax return for a preceding year, since amounts may not be known in time.

*
Separately, one thing that I have considered for my will (when I do get to re-doing it), is to make it line up with the proportions that are commonly accepted here--eg, half to the spouse, the other half divided equally among direct children. (or if pre-deceased by spouse, all of it then divided among children)

**

EDIT: And this is the reddit JapanFinance wiki, section on inheritance (and the link/tab to the full wiki is at the top). Both of these wikis (wikums?) have many other interesting topics and linked readings.