So, my mother emailed today to request a family Zoom meeting with myself, and my sister (UK citizen and resident) re. my parents (still married, UK citizens and residents) changing their wills. Specifically on whether to keep, or remove, a Fixed Life Investment Trust from their will.
This is the first time we've discussed wills apart from being told that there would be a little for my son allowed for, alongside my and my sister's future inheritance. (If relevant my sister has adult step-children from her husband's first marriage, but they have not had children together).
I know there are probably a thousand and one details that could guide my query better, but basically are there any pros/cons to receiving inheritance in Japan for me and my son from a straight will, or a will with a FLIT in it that I should be aware of? (My sister's husband worked in pensions/finance for a long time and so geographically, and knowledge-wise, I feel they certainly have HOME advantage...)
Also, as an aside, does the UK have a similar "gift" system (1.1m yen IHT free if giftor survives more than 7 years?)
UK Will - to Trust, or not Trust - Pros/Cons?
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Seasider4374
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captainspoke
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Re: UK Will - to Trust, or not Trust - Pros/Cons?
Japan doesn't recognize trusts, or rather, it sees thru them.
The problem is the kind of trust that delays disbursement of any funds, such as if when I die, my trust awards certain funds at some future time (such as a child's future birthday--on turning 25, 30, 35, and so on).
Japan would see the child as having inherited it all, immediately. And want taxes paid on it. So on death of the grantor, the child may have a tax bill that is larger than what they initially receive.
IANAL, but I think that a trust that disburses everything immediately (and at the same time dissolves itself), is okay. The child would declare the inheritance and do a tax return, and go on with life.
And my understanding and perspective on this is as a US person. UK will likely have different issues, pros/cons, so good luck.
You might also read thru the RetireJapan wiki on inheritance: https://retirewiki.jp/wiki/Inheritance_tax
One point to keep in mind is statutory heir. Eg, a child of the deceased is a statutory heir, and grandchild is not.
The problem is the kind of trust that delays disbursement of any funds, such as if when I die, my trust awards certain funds at some future time (such as a child's future birthday--on turning 25, 30, 35, and so on).
Japan would see the child as having inherited it all, immediately. And want taxes paid on it. So on death of the grantor, the child may have a tax bill that is larger than what they initially receive.
IANAL, but I think that a trust that disburses everything immediately (and at the same time dissolves itself), is okay. The child would declare the inheritance and do a tax return, and go on with life.
And my understanding and perspective on this is as a US person. UK will likely have different issues, pros/cons, so good luck.
You might also read thru the RetireJapan wiki on inheritance: https://retirewiki.jp/wiki/Inheritance_tax
One point to keep in mind is statutory heir. Eg, a child of the deceased is a statutory heir, and grandchild is not.