How to invest inheritance

[RetireJapan]

if one could find an overseas investment vehicle that would never pay dividends or realize income otherwise, leaving it overseas might have its attractions

Accumulating ETFs? I have some SWDA for that reason.

[captainspoke]

In contrast to capital gains/losses, reporting dividends is painless, IMO. If a person limited themselves to a two fund portfolio there would probably be eight items to deal with (four quarterly distributions from each fund). Easy peasy.

And if you want to minimize the tax impact of dividends, there are any number of ETFs that pay dividends in the 0.6% range (eg, growth, or tech-leaning funds), which would be just $6000 on $1M. (tho you may want to balance out that skew towards growth by adjusting down your exposure elsewhere) Or, if you trust his choices, and his succession plans, put it all in berkshire hathaway, which pays no dividends at all.

[cocacola]

Any particular reason you want to bring the money into Japan?

I am non-resident of Canada, which means (as far as I know) that I cannot hold real estate nor actively invest in Canada. I'd like to invest the funds, instead of just leaving it as Canadian cash.

[cocacola]

I've been doing some more research as to what to invest the inheritance in, lump-sum. I'm interested in the Vanguard VTI (Vanguard Total Stock Market ETF) and found Rakuten's version of the VTI. I made a comparison spreadsheet.



I'd like to put a portion on the Rakuten VTI, but I couldn't find information on whether the "automatic tax preparation" can be done for it or not. If not, since my company handles all of my tax stuff, would it be just as easy as printing out some documents and sending it to my company's accountant? Or, would I have to hire my own accountant? Would I even need to file for the taxes if the dividends are consistently re-invested?

Sorry for the simpleton questions!

Also, what do you think about Rakuten VTI? Are there any other better choices? I will definitely put some of the inheritance on eMaxis Slim All Country, just thinking of trying another fund at the same time.

[Gulliver]

Any particular reason you want to bring the money into Japan?

I am non-resident of Canada, which means (as far as I know) that I cannot hold real estate nor actively invest in Canada. I'd like to invest the funds, instead of just leaving it as Canadian cash.

OK that makes sense. Also, the JPY is relatively weak at the moment (a good thing for you), so you may want keep an eye on that.

[RetireJapan]

I'd like to put a portion on the Rakuten VTI, but I couldn't find information on whether the "automatic tax preparation" can be done for it or not. If not, since my company handles all of my tax stuff, would it be just as easy as printing out some documents and sending it to my company's accountant? Or, would I have to hire my own accountant? Would I even need to file for the taxes if the dividends are consistently re-invested?

The tax paperwork can definitely be avoided. It depends on what kind of account you hold the investment in.

If it is in a NISA account, no tax paperwork.

If it is in a tax-deducting account (特定口座源泉徴収あり）, no tax paperwork.

If it is in an ordinary (一般) account, you will need to file your own taxes, but not if dividends are reinvested as long as you don't sell.

[cocacola]

The tax paperwork can definitely be avoided. It depends on what kind of account you hold the investment in.

If it is in a NISA account, no tax paperwork.

If it is in a tax-deducting account (特定口座源泉徴収あり）, no tax paperwork.

If it is in an ordinary (一般) account, you will need to file your own taxes, but not if dividends are reinvested as long as you don't sell.

Excellent! Thanks for the clarification.

Are there fee differences between the tokutei kouza vs. ordinary account? Are there restrictions on types of funds/stocks that can be purchased on the tokutei account? I think I read somewhere that Japan-only products can be purchased through the tokutei account...

[RetireJapan]

Excellent! Thanks for the clarification.

Are there fee differences between the tokutei kouza vs. ordinary account? Are there restrictions on types of funds/stocks that can be purchased on the tokutei account? I think I read somewhere that Japan-only products can be purchased through the tokutei account...

No, and no, I believe. I have bought and sold US listed stocks and ETFs in a tokutei account, as well as Japanese ones. It really is an amazing system.