RetireJapan

By the way, sorry to throw a potential damper on your plans but have you considered how much Japanese CGT (capital gains tax) you will have to pay on this windfall? If your dad had owned the house for a long time then it could be substantial, because it is based on the value of the house when your dad acquired it, and not its value when you acquired it through inheritance or gifting. There's a 3000 man deduction that would wipe out most of the taxable gains in your situation, but it is designed for Japanese houses and may not apply to foreign ones:
https://www.nta.go.jp/taxes/shiraberu/s ... okurei.htm
(this page says that the deduction will expire at the end of this year but I believe it has been extended by 4 more years)

You won't have to report it until you submit your final income tax return early next year, but I'm wondering what your plan of action is and if you'll hire a professional to try to get the 3000 man deduction (I can imagine a lot of supporting documents will be required). The procedure and outcome of this will be very interesting to those of us who will inherit overseas property in the future, so thank you in advance for any light you can shed on it

northSaver wrote: ↑Mon Oct 02, 2023 1:59 am By the way, sorry to throw a potential damper on your plans but have you considered how much Japanese CGT (capital gains tax) you will have to pay on this windfall? If your dad had owned the house for a long time then it could be substantial, because it is based on the value of the house when your dad acquired it, and not its value when you acquired it through inheritance or gifting. There's a 3000 man deduction that would wipe out most of the taxable gains in your situation, but it is designed for Japanese houses and may not apply to foreign ones:
https://www.nta.go.jp/taxes/shiraberu/s ... okurei.htm
(this page says that the deduction will expire at the end of this year but I believe it has been extended by 4 more years)

You won't have to report it until you submit your final income tax return early next year, but I'm wondering what your plan of action is and if you'll hire a professional to try to get the 3000 man deduction (I can imagine a lot of supporting documents will be required). The procedure and outcome of this will be very interesting to those of us who will inherit overseas property in the future, so thank you in advance for any light you can shed on it

House was sold before he died to pay for care home fees so we are inheriting cash rather than property, which I hope would mean CGT wouldn’t apply.

captainspoke wrote: ↑Sun Oct 01, 2023 9:48 pm Sure--enjoy spending it. Like why not throw a big weekend-long party...

...for all the people posting here?

You know where I live. Not paying travel costs!

Beaglehound wrote: ↑Sat Sep 30, 2023 2:51 pm ..We own our house outright...

I am fairly comfortable that the above (plus we are still working and saving) should see us alright for living expenses, so I guess I am viewing this extra money as extra money. So I don’t think there is much need to take huge risk with it (no kids), but don’t want to let it sit in the bank being inflated away either.

Have you thought about donating?
I have two unworthy causes I've been supporting for about 20 years.
One I recently lent money to travel with and they actually laughed when I mentioned repayment.
The other is living away and consumes enough electricity to warranty drug raid someplace else whilst somehow still not getting rich off bit coin mining.
Seriously, anything you can spare will help.

That aside, how about an EV along with Solar and Battery. If you live Tokyo there are massive rebates to be had.
I've just got the EV and about to sign up for Solar and battery.
Even though feed in tariffs are now quiet modest, due to the rebates this will turn a profit within 10 years and thanks to the battery it will feel nice not having to think about night time a/c use during the summer months of May-Oct
Oh, and something, something, planet..

Beaglehound wrote: ↑Mon Oct 02, 2023 2:12 am House was sold before he died to pay for care home fees so we are inheriting cash rather than property, which I hope would mean CGT wouldn’t apply.

Ah OK, thanks. That's good timing in terms of CGT.
If anyone else has been through a similar situation but inherited a house as well as cash, please let us know how you handled the CGT, especially regarding the 3000 man deduction. Thanks!

Moneymatters wrote: ↑Mon Oct 02, 2023 3:02 am

Beaglehound wrote: ↑Sat Sep 30, 2023 2:51 pm ..We own our house outright...

I am fairly comfortable that the above (plus we are still working and saving) should see us alright for living expenses, so I guess I am viewing this extra money as extra money. So I don’t think there is much need to take huge risk with it (no kids), but don’t want to let it sit in the bank being inflated away either.

Have you thought about donating?
I have two unworthy causes I've been supporting for about 20 years.
One I recently lent money to travel with and they actually laughed when I mentioned repayment.
The other is living away and consumes enough electricity to warranty drug raid someplace else whilst somehow still not getting rich off bit coin mining.
Seriously, anything you can spare will help.

Hmm, the (no kids) part of my post may well be the key one!

northSaver wrote: ↑Mon Oct 02, 2023 3:23 am

Beaglehound wrote: ↑Mon Oct 02, 2023 2:12 am House was sold before he died to pay for care home fees so we are inheriting cash rather than property, which I hope would mean CGT wouldn’t apply.

Ah OK, thanks. That's good timing in terms of CGT.
If anyone else has been through a similar situation but inherited a house as well as cash, please let us know how you handled the CGT, especially regarding the 3000 man deduction. Thanks!

Yes, fortuitous timing, we only sold because his money was about to run out.
The situation on inheriting an actual overseas property from parents sounds like one that may not end up costing anything (or much) tax wise in the end but would be a royal PITA (and cost money) to prove. I can just imagine the horror of my local rural tax office if I went in to explain that kind of situation to them. Would not surprise me if they just told me to go away

Moneymatters wrote: ↑Mon Oct 02, 2023 3:02 am That aside, how about an EV along with Solar and Battery. If you live Tokyo there are massive rebates to be had.

That's a great idea! More sensible than an Aston Martin, I must admit.
Hang on... don't they make supercars with electric engines now? Interesting...

Beaglehound wrote: ↑Mon Oct 02, 2023 3:47 am Yes, fortuitous timing, we only sold because his money was about to run out.
The situation on inheriting an actual overseas property from parents sounds like one that may not end up costing anything (or much) tax wise in the end but would be a royal PITA (and cost money) to prove. I can just imagine the horror of my local rural tax office if I went in to explain that kind of situation to them. Would not surprise me if they just told me to go away

I think it would cost some people a fortune, with or without the special deduction. Imagine a house in greater London that has been in the family for years. The CGT could be well over a thousand man!
I agree about the local tax office. But despite what they say, if you eventually bring the money to Japan you can probabIy count on someone in the NTA asking about it, and demanding payment - and possibly late-payment penalties - if CGT were due

Beaglehound wrote: ↑Sat Sep 30, 2023 12:32 pm Any and all opinions welcome.

My father recently passed and in due course I will be receiving an inheritance of c.£150k. It’s not money I was ever counting on as he was in a care home latterly and that eats cash, but my sister and I sold his house for more than expected and so I have the nice problem of what to do with it.

I can leave it in a reasonable paying U.K. savings account for a while, but will eventually look to bring it over here, and I am thinking of using it to gradually fill the new NISA. But I am not sure how best to invest it. For background, my wife and I are 53 and won’t need the cash before 65 at least. I am looking at a target date fund as a ‘set and forget’ option, but wondered what others would do in this scenario?

The main variables are:
Amount available to invest (in your case we know this)
Your financial knowledge (high, medium, low)
Your capacity for risk (roll the dice, cautious, old lady coupon-clipper)
Your timeline (in your case we know this)

I was in a similar situation. Inherited money and had to do something with it. Paid no taxes anywhere and kept it on the down-low. Good financial advisors in my case.

You ask what others would do. All I can tell you is exactly what I DID with my inheritance. Could I have done better? Maybe, but this is what I did:

I put 70% in stocks that I selected myself, mostly established banks and REITs (for the dividends).

20% went into government bonds of a few countries.

10% cash.

Nothing went into NISA, ETFs, insurance, annuities, properties or any other financial instruments. Did not use any of it to pay off loans.

I splurged on a Gran Class train seat for me and my wife for the return portion of our vacation.

NISA is not a guarantee of profit. It merely eliminates taxes on any profits that you MIGHT gain.

By the way, I’ve never met anyone who admits to NOT making money with their NISA account. Everyone’s a winner!

Silversurfer wrote: ↑Thu Mar 21, 2024 11:15 pm Nothing went into NISA, ETFs, insurance, annuities, properties or any other financial instruments. Did not use any of it to pay off loans.

Why would you not use NISA? You can still choose stocks, you just don't have to pay tax on them later