RetireJapan

sarge57 wrote: ↑Sun May 07, 2023 1:59 pm

In that case the estate would be dealt with according to that legal division (so 2/3 of the value of the house would be in your wife's father's estate).

So if the house was valued at 120 yen and my wife's mother dies, then the inheritance amount for tax for her father would be 40 yen.

But if her father dies the inheritance tax amount would be 80 yen for her mother.

Am I interpreting that correctly ?

Thanks as always

That's my understanding! Bear in mind house will be addressed as having the land tax value rather than market value, and there are various tax breaks for spouses and living in the home already.

Inheritance Tax Spouse Credit

I modeled The Spouse Credit - Haigusha No Zeigaku Keigengaku - 配偶者の税額軽減額 - in a spreadsheet.


If the 'Actual Net Taxable Assets' assigned to the Spouse is less than Y160M, the 'Actual Share of the Estate' assigned to the Spouse is less than Y160M plus the spouse's allocation of the Sum of the Basic and Per Heir Deductions, the spouse pays No Inheritance Tax, regardless of the actual percentage share of the Estate she actually receives.

If the 'Actual Share of the Estate' assigned to the Spouse is MORE than Y160M plus the spouse's allocation of the Sum of the Basic and Per Heir Deductions, but the actual percentage share of the Estate she actually receives is LESS than, or equal to the percentage Statutory Share of the Estate assigned to the Spouse, the spouse pays No Inheritance Tax, regardless of the actual amount of the Estate she actually receives.

If the 'Actual Share of the Estate' assigned to the Spouse is MORE than Y160M plus the spouse's allocation of the Sum of the Basic and Per Heir Deductions, and the actual percentage share of the Estate she actually receives is MORE than the percentage Statutory Share of the Estate assigned to the Spouse, the spouse pays Inheritance Tax on the excess she receives over the Statutory Share.

See https://retirewiki.jp/wiki/Inheritance_tax

e.g.

If the Spouses Statutory Share is 50%, then anything below Y160M + 50% or the Sum of Basic and Per Heir Deductions, then the spouse's share of the Estate is completely Tax Free.

If the Spouses Statutory Share is 50%, then if the spouse receives 50% or less of the Total Estate, it is completely Tax Free.

If the Spouses Statutory Share is 50%, then if the spouse receives more than 50% of the Total Estate, the spouse pays Inheritance Tax only on the amount above 50%. If te spouse actually received 70% of the Estate, the spouse would pay Inheritance Tax only on the difference between the 70% and the Statutory 50%, so only on the excess 20%.

If the Spouses Statutory Share is 100%, then if the spouse receives 100% or less of the Total Estate, it is completely Tax Free.

Hi Tykdon

thank you for your really detailed replies. It is all good invaluable information. I very much appreciate the effort you have made.

Unfortunately I find myself fisting myself in the face in frustration that I cannot engage with the information you have provided until you answer my original question.

Have you read my original question?

Thank you

Sarge

sarge57 wrote: ↑Thu May 04, 2023 1:15 pm I know it's complicated, and there are nested layers of IF, THEN, ELSE logic gates to negotite.

But, keeping the numbers simple, and leaving aside all other complications if possible....

If I have 100 yen savings and my Japanese gf has 100 yen savings and we get married. And one of us dies, then will the taxable starting point for inheritance tax be the 100 yen that the other person left, or the 200 yen that we had between us.

Basically do I get taxed for inheriting my own money ?

No, you do not get taxed, because you do not inherit your own money. It's your money.

If you have 100 yen savings and your Japanese gf has 100 yen savings and you get married. And one of you dies, then the starting point for calculation of the value of the Estate for inheritance tax will be the 100 yen that the other person left (their Estate), and will not include your 100 yen (your Estate).

Depending on whether you have children, or if not, if she has relatives who qualify as Statutory Heirs, then as the Spouse, you would be entitled to receive up to your Statutory Percentage Share of her Estate completely Free of Inheritance Tax, no matter how much it may be.

Even if you receive more than your Statutory Percentage Share of her Estate, if the total amount you receive is less than Y160M, then it will be completely Free of Inheritance Tax.


There is no concept of Communal Assets in Japan. Her Assets will be her Estate, and Your Assets will be your Estate.
There are no Joint Bank Accounts.
You can jointly own a property with both names on the deed, with stated shares; 50/50, 75/25, etc..
Her share is her Estate and your share is your Estate.

Be aware that if both parties do not contribute to the payments/costs in proportion to their shares of the property, the difference will be considered a gift from one party to the other and liable for Gift Tax.
There is a one-time opportunity to transfer Property, or Y20M in Cash for purchase of Property, for Primary Residence to a spouse of more than 20 years, free from Gift Tax.

sarge57 wrote: ↑Thu May 04, 2023 1:15 pm I know it's complicated, and there are nested layers of IF, THEN, ELSE logic gates to negotite.

But, keeping the numbers simple, and leaving aside all other complications if possible....

If I have 100 yen savings and my Japanese gf has 100 yen savings and we get married. And one of us dies, then will the taxable starting point for inheritance tax be the 100 yen that the other person left, or the 200 yen that we had between us.

Basically do I get taxed for inheriting my own money ?

I think the question has a faulty premise. In the eyes of the law, you have your assets, and she has her own.

Yes, joint ownership of assets is possible, but your wives money is not yours.

TokyoBoglehead wrote: ↑Thu May 11, 2023 12:25 pm

sarge57 wrote: ↑Thu May 04, 2023 1:15 pm I know it's complicated, and there are nested layers of IF, THEN, ELSE logic gates to negotite.

But, keeping the numbers simple, and leaving aside all other complications if possible....

If I have 100 yen savings and my Japanese gf has 100 yen savings and we get married. And one of us dies, then will the taxable starting point for inheritance tax be the 100 yen that the other person left, or the 200 yen that we had between us.

Basically do I get taxed for inheriting my own money ?

I think the question has a faulty premise. In the eyes of the law, you have your assets, and she has her own.

Yes, joint ownership of assets is possible, but your wives money is not yours.

If you had a property that was owned You 75% / 25% your wife,

then if she dies first, her Estate when she dies will be valued at the 25% of the value of the property. Less likely.

if you die first, your Estate when you die will be valued at the 75% of the value of the property. More likely.

Tykdon,

thank you for answering my original question.

As that confirms what Retire says, I am confident now to look at the other details that you have provided.

I will no doubt have follow up questions, thank you again.

Sarge