NISA change proposals

[TokyoBoglehead]

I used to save a bit of my annual allowance for the purpose of rebalancing at the end of the year

If you are still accumulating, you can "rebalance" by directing where you put the new funds, removing the need to sell any holdings.

Indeed, and global equities funds are attractive precisely because they are self balancing by nature.

[zeroshiki]

According to this youtuber https://www.youtube.com/watch?v=gS-xHImbRFU the Komeito has expressed reservations about basically doing a tax cut for the rich by expanding NISA. Although it seems like the LDP wants it so his guess is they might increase TNISA to 600k and make it forever BUT also increase cap gains to be more in line with the rest of the world (30%-ish?)

It would be an interesting way for the government to justify tax cuts (or more accurately make a tax increase sound like a good idea).

[Wales4rugbyWC23]

Proposal of the removal of both the 5/20 year limit and the end date of the scheme, i.e. making it a permanent allowance available every year.
Proposal to increase the annual allowance (no further details given).
Proposal to extend Tsumitate NISA to under-20s.
Proposal to saqghom mupwI' betleH bey' ghem lupDujHom van Dub neb qaywI' loghqam van.

All we need is for them to add a couple of zeros onto the NISA allowance, then Japan will become like Singapore

Ideco allowance could be made a bit more generous, too. In the UK yearly pension allowance is double that of the ISA.

[sutebayashi]

According to this youtuber https://www.youtube.com/watch?v=gS-xHImbRFU the Komeito has expressed reservations about basically doing a tax cut for the rich by expanding NISA. Although it seems like the LDP wants it so his guess is they might increase TNISA to 600k and make it forever BUT also increase cap gains to be more in line with the rest of the world (30%-ish?)

It would be an interesting way for the government to justify tax cuts (or more accurately make a tax increase sound like a good idea).

That’s amusing, if they increase capital gains tax rate like that, my response will be to not realize capital gains, and eliminate or at least reduce the amount of capital gains tax I would pay.

I am willing to realize capital gains to the extent that the tax rate is low, reasonable and therefore to my mind fair (typically for rebalancing, but a little short term speculation too), but if they create such incentives to not realize capital gains, I will follow suit, and not take the risk.

I am small fish but then there are the day traders who might be encouraged to take up residency elsewhere facing such a change.

So I would take a bet that such a move would reduce tax revenues from capital gains, but let’s see what gets announced finally…

[zeroshiki]

Japan is obsessed with fairness (or the appearance of it). It's why to buy any kind of concert or event ticket you need to do lotteries. It seems more fair even if it's tedious.

If pulling up the cap gains to 30% allows them to give bigger NISA benefits, I think losing day traders isn't that big of a deal. In fact, I might even consider that a desirable outcome. Less people trying to game the market.

[bryanc]

That article is saying "New NISA" in 2024 will be withdrawn and a new "General NISA" that takes over both of them will be used with the idea being that they want to shuffle people more towards Tsumitate than Normal (so MFs instead of stocks)

sorry i dont quite understand the reasoning here-please explain-thanks

[TokyoBoglehead]

sorry i dont quite understand the reasoning here-please explain-thanks

The Proposal is One nisa to rule them all. Only one account type.

(e.g due away with all the Junor,Tsumuta, Regular, New crap that confuses everyone and have one option).

[bryanc]

thanks- it was the mfs rather than stocks bit i couldnt follow

[zeroshiki]

Basically if the government had its way, they'd just expand Tsumitate NISA to be the only thing we're allowed to buy. T-NISA has a curated list of mutual funds that the government considers safe. You cannot buy leverage funds or ETFs or single stocks into T-NISA.

[zeroshiki]

It's very confusing but Kishida's income multiplier plan was approved today and the main point was the improvement of NISA. It seems that NISA will most assuredly become infinite from the current 5/20 but they don't say anything about Normal/Tsumitate or what the limits will be. I've read the Sankei and Nikkei articles on it and it seems like what the government approved was basically:

- Double the number of NISA accounts in 5 years
- Make NISA permanent
- Tax free period of NISA will be forever
- New NISA will be scrapped and whatever the new one is will replace it
- Simplify NISA (???)
- Increase NISA limit

Some stuff about iDeCo too mainly around increasing the age you can contribute to it (until 70), limits and age you can start receiving benefits.