RetireJapan

RolandB1 wrote: ↑Fri Aug 20, 2021 9:26 am Her parents are in their late 60s/early 70s so we still have time to plan on what to do.
Thanks in advance.

In other countries, passing on assets well before death is recommended, to reduce/avoid these taxes. Does anyone know if that applies in Japan?

beanhead wrote: ↑Fri Aug 20, 2021 10:57 pm

RolandB1 wrote: ↑Fri Aug 20, 2021 9:26 am Her parents are in their late 60s/early 70s so we still have time to plan on what to do.
Thanks in advance.

In other countries, passing on assets well before death is recommended, to reduce/avoid these taxes. Does anyone know if that applies in Japan?

From what I’ve read online there is a 10 year rule where if you live together with your parents for 10 years before you inherit the land you don’t have to pay inheritance tax. It used to be 5 years but the law changed in 2017 to reduce tax evasion.
I also believe that it is possible to give up to 1,000,000 yen per year tax free to your children without having to pay tax.

Nice problem to have, but seems as though you may have to sell off some of the land to pay the taxes (?)

RolandB1 wrote: ↑Fri Aug 20, 2021 11:07 pm From what I’ve read online there is a 10 year rule where if you live together with your parents for 10 years before you inherit the land you don’t have to pay inheritance tax. It used to be 5 years but the law changed in 2017 to reduce tax evasion.
I also believe that it is possible to give up to 1,000,000 yen per year tax free to your children without having to pay tax.

I believe that first one refers to a residence, ie not some random plot of land.

Anyone can receive up to 1.1m yen a year in gifts before having to pay gift tax.

You should talk to a professional about this. An initial consultation should be a good investment given the stakes.

RetireJapan wrote: ↑Sat Aug 21, 2021 4:50 am

RolandB1 wrote: ↑Fri Aug 20, 2021 11:07 pm From what I’ve read online there is a 10 year rule where if you live together with your parents for 10 years before you inherit the land you don’t have to pay inheritance tax. It used to be 5 years but the law changed in 2017 to reduce tax evasion.
I also believe that it is possible to give up to 1,000,000 yen per year tax free to your children without having to pay tax.

I believe that first one refers to a residence, ie not some random plot of land.

Anyone can receive up to 1.1m yen a year in gifts before having to pay gift tax.

You should talk to a professional about this. An initial consultation should be a good investment given the stakes.

I should have mentioned that the parents live in a house on the land, it also has a large shed and the rest is the garden. The plan is to live in the house when we retire (we are currently renting a house in a different prefecture). I’m sure we’ll have to sink some money into the house for renovation etc as it will be 60 years old by the time I retire.

beanhead wrote: ↑Sat Aug 21, 2021 4:46 am Nice problem to have, but seems as though you may have to sell off some of the land to pay the taxes (?)

Yes, it is a nice problem to have. The only thing is that my wife knows very little about the subject so that’s why I am doing some research about it. I have considered that we might have to sell some of the land as it is mostly garden and a large shed which is mostly full of junk. The land has been passed down in her family but I would be fine with selling it and living elsewhere. It’s not that it’s in a bad location - it’s only 30 mins train ride to Yokohama so relatively close to Tokyo as well.