Declaring Capital Gains

[goodandbadjapan]

"No, I didn't say that." Not to be too contrary, but in your OP: "Now, the way this plan worked ... I didn't really know what I was buying."

But anyway, what follows is good to hear. And I guess your accountant did it, so it's done, (it sounds like it would take a lot of calculation)

"I had bought various funds regularly over years and then partially sold the funds. A partial redemption, which was the key issue. As the price of the units varied over the years, I didn't know how to calculate the gain as I didn't know which units I was selling - the ones I bought in, say 2011, or those bought in say 2015, at a considerably different price. Say i bought 100 units in a fund for $100 in year one and then added 100 units in year 2 at a cost of $150 and then bought, say, 50 units in year 3 at $200 because the price has risen, then in year 4 I sell 70 units. To know the gain, I needed to know if they were all units bought at the year 1 price or at the year 2 price or maybe year 3 with some of year 2 etc. The gain would differ and that is what I didn't now how to do and was trying to get the info for. I knew how many units I had sold and what i got for them, of course, but the gain would differ depending on when I had bought those sold units. Had they sold the units bought in year 1, or year 2 or a combination? And that's what nobody could tell me - which precise units I had sold."

Yes - I was a bit ignorant as to the finer details! What I meant was I was told the the names of the funds etc, of course, but was laying my trust in somebody else to choose them. So in that sense, I didn't really know what I was buying. Anyway, thankfully those days are all behind me!

[Cheeseman]

As I stated in a previous reply, I’m in a similar situation as the original poster. But mine is a full surrender. I went to the tax office last week to hopefully get some insight... however, my hopes were dashed, I left the office none the wiser. The young chap “helping” really didn’t seem to know anything about CGT or separate filing from salary but did give me a copy of 2018 tax info in English to go with my 2019 version that also has so info about CGT.

I could just add it to salary but this would double my income and result in massive(to me) city tax and health payments.
I have read somewhere that long term capital gains can be filed separately at a rate of 20.3% but can’t find anything about how to do this.
Or just do nothing. I obviously don’t like paying tax but do like to stay on the right side of the law. Both the source of the funds and the account the gains went to are overseas but both linked to “my number”
I would be very happy if someone could shine some light in my direction.

[Konjou]

As I stated in a previous reply, I’m in a similar situation as the original poster. But mine is a full surrender. I went to the tax office last week to hopefully get some insight... however, my hopes were dashed, I left the office none the wiser. The young chap “helping” really didn’t seem to know anything about CGT or separate filing from salary but did give me a copy of 2018 tax info in English to go with my 2019 version that also has so info about CGT.

I could just add it to salary but this would double my income and result in massive(to me) city tax and health payments.
I have read somewhere that long term capital gains can be filed separately at a rate of 20.3% but can’t find anything about how to do this.
Or just do nothing. I obviously don’t like paying tax but do like to stay on the right side of the law. Both the source of the funds and the account the gains went to are overseas but both linked to “my number”
I would be very happy if someone could shine some light in my direction.

I have always found the Japanese tax office to be very helpful and approachable for your standard run-of-the mill questions.

As the complexity of your situation increases, each city offers a free sit down service, where you are able to talk with a qualified tax accountant. The main drawback being, the amount of time involved, unless you have all your paperwork in order, it can result in several trips back and forth and you may not be able to discuss your situation with the same accountant. Not to mention having to sit around for hours waiting.

Also be aware, that they are fully qualified tax accountants in Japan and may lack the experience of international taxation.

I would also warn of a lack of accountability with this service, they will do their best to help you with the information you provide but at the end of the day you will be ultimately responsible for the final document and any discrepancies that it may include.

Depending on the size of your CGT, speaking with an International Tax accountant is by far the most straight forward (and expensive!) way to go.

Many firms offer a free initial consultation to establish if its worthwhile for both parties, and are usually very upfront about if they feel they can add value to you situation.. After that be prepared to be paying up to 30,000 yen an hour ! (It will depend on how many letters they have after their name.)

At the same time they will do their best to reduce the amount of tax you have to pay, and you will have the safety net of accountability from the firm for filing your taxes, and it will save you all those hours of sitting around at the tax office.

In my opinion, I would try to avoid some of the bigger tax firms, they tend to charge a lot more. Try to find a smaller, more personal firm, with more reasonable fees and they usually give a slightly better service.

Or just do nothing.

Ahh...the high risk, high return method No fees, no paperwork, no hassle, no wasted time.

By about year 11 you should be all free and clear, maybe.

Just be aware that the tax office has ultimate discretion on the penalties and fines they impose and it is usually based on the size and intention of your tax filing.

Anyway, good luck.

[StockBeard]

I have read somewhere that long term capital gains can be filed separately at a rate of 20.3% but can’t find anything about how to do this.
[...]
I would be very happy if someone could shine some light in my direction.

The form for separate taxation is this one AFAIK:
https://www.nta.go.jp/taxes/shiraberu/s ... r01/03.pdf

I would love to explain how this is filled, except that I have a semi-automated script that does it for me (and will not match your use case), and I can't find the documentation I used to compute all of this on my end (because nta.go.jp site has moved this information again).

In my case, it is used in combination with the stocks form (which I can't find anymore because the nta.go.jp site keeps moving files around with no redirection whatsoever). Edit: this guy I think: https://www.nta.go.jp/taxes/shiraberu/s ... f/a048.pdf

And the way it works is that the numbers are computed in the stocks (capital gain) forms, then surfaced up to the separate taxation form, along with dividends (probably dividends not needed in your case?). The separate taxation form taxes capital gains and dividends at 15%* and adds this to your income tax, and the result of that then replaces your actual taxed income. (entry 86 on the separate tax form is copied into entry 27 of the tax return form).

* After that, there is an additional 5% tax for inhabitant tax, which puts the total at a 20% flat if I understand correctly.

[Cheeseman]

StockBeard.... Thank you. I went to the tax office, they helped with the computer input. Just used my figure for gain and exchange rate .....Very easy in the end .
Except having to pay them money.

[Cheeseman]

Did the painful bank transfer to the tax man today.....

I managed to lesson the pain very slightly by reminding myself how much the funds would have been worth today if I hadn’t cashed them.
Always searching for that silver lining!

[beanhead]

StockBeard.... Thank you. I went to the tax office, they helped with the computer input. Just used my figure for gain and exchange rate .....Very easy in the end .

Was it calculated based on capital gains? So 20.3% tax due?