NISA change proposals

[TokyoBoglehead]

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.

Great news. Does this need to go throw political assent? Is a it a parliamentary budget item (as it will reduce income via tax) , a regular legislation, or simply enacted policy?

I would guess the simplification would entail only one account type?

Any words on child accounts?

[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.

Great news. Does this need to go throw political assent? Is a it a parliamentary budget item (as it will reduce income via tax) , a regular legislation, or simply enacted policy?

I would guess the simplification would entail only one account type?

Any words on child accounts?

According to what I researched on JP Twitter, this is basically "law" but in the roundabout Japanese way that policy is made in Japan. The next step is for the tax agency to draw up guidelines for it, announce it and then implement by April 2023.

There's no confirmation either way on account types. The article I read even speculated that regular and tsumitate would co-exist but that doesn't make sense to me because if the time limit is infinity then why would anyone choose Tsumitate. Especially as one of the stated goals is "simplification".

Nothing about Junior NISA but I suspect that's gone since there's nothing in the articles about it.

[Tkydon]

.

[RetireJapan]

- Make NISA permanent
- Tax free period of NISA will be forever
- Increase NISA limit

This is basically everything I wanted. Sniff

[ClearAsMud]

The abolition of Junior NISA was included as part of the 2020 tax reform, and while there is always the theoretical possibility it will be revived, the government's current plan makes no mention of it, nor has there been any indication from any other quarter that it will be continued beyond 2023. So unless something quite unexpected takes place -- not that that's absolutely impossible -- next year will be the last year for opening or adding to Junior NISA accounts. Once all pre-2024 accounts have run their course, under-18s will simply be out of luck.

As for Regular and Tsumitate NISA, only the outlines as described in the above posts have been made available. The decision made in yesterday's cabinet meeting simply formalized the plan that was announced on November 25 (which is why media coverage of the meeting was negligible), resulting in publication of the government's full 18-page "Plan to Double Income from Financial Assets". This plan is supported by seven "pillars," the first of which involves NISA and runs to almost four pages in the document but offers very little in the way of specifics. Basically, as others have mentioned, the originally proposed two-level "New NISA" is to be scrapped in favor of something simpler that allows both Regular NISA and Tsumitate NISA accounts to run in perpetuity and to be increased in size. That's really about as far as it goes. Concrete proposals are to be considered and formulated by the Tax Advisory Committee from the middle of next month to around the end of the year, but it should be noted that this committee has already indicated some resistance to the announced NISA proposals as disproportionately favoring the wealthy. For now, we're still mostly in a wait-and-see situation (except regarding Junior NISA).

Cabinet-meeting decisions have legal standing as official administration policy, but they most definitely do not have the status of law -- that comes only through approval by the Diet, and it's never really over until it's over. By the way, actions taken at cabinet meetings are made public on the prime minister's website.

For more details about how current Junior NISA accounts will be handled in 2023 and 2024, see
the official explanation on this page or the less bureaucratic explanations here or here.

[TokyoBoglehead]

The abolition of Junior NISA was included as part of the 2020 tax reform, and while there is always the theoretical possibility it will be revived, the government's current plan makes no mention of it, nor has there been any indication from any other quarter that it will be continued beyond 2023. So unless something quite unexpected takes place -- not that that's absolutely impossible -- next year will be the last year for opening or adding to Junior NISA accounts. Once all pre-2024 accounts have run their course, under-18s will simply be out of luck.

As for Regular and Tsumitate NISA, only the outlines as described in the above posts have been made available. The decision made in yesterday's cabinet meeting simply formalized the plan that was announced on November 25 (which is why media coverage of the meeting was negligible), resulting in publication of the government's full 18-page "Plan to Double Income from Financial Assets". This plan is supported by seven "pillars," the first of which involves NISA and runs to almost four pages in the document but offers very little in the way of specifics. Basically, as others have mentioned, the originally proposed two-level "New NISA" is to be scrapped in favor of something simpler that allows both Regular NISA and Tsumitate NISA accounts to run in perpetuity and to be increased in size. That's really about as far as it goes. Concrete proposals are to be considered and formulated by the Tax Advisory Committee from the middle of next month to around the end of the year, but it should be noted that this committee has already indicated some resistance to the announced NISA proposals as disproportionately favoring the wealthy. For now, we're still mostly in a wait-and-see situation (except regarding Junior NISA).

Cabinet-meeting decisions have legal standing as official administration policy, but they most definitely do not have the status of law -- that comes only through approval by the Diet, and it's never really over until it's over. By the way, actions taken at cabinet meetings are made public on the prime minister's website.

For more details about how current Junior NISA accounts will be handled in 2023 and 2024, see
the official explanation on this page or the less bureaucratic explanations here or here.

Thank you for the details. This confirms that it was worth hustling to get my son 4 years worth of contributions. I will try to get my soon-to arrive daughters account setup and funded for 2023. It still seems worth it for 1 year.

Also, keeping both Tsumutate/Regular Nisa when removing time limits seems pointless, I assume the actual working draft will have a single account type.

[zeroshiki]

I think we're basically all in agreement that encouraging day trading shouldn't be what the government does with our tax money so I for one would be really excited if they gave T-NISA the normal NISA limit (1.2M) and kept the restrictions (to only allow curated mutual funds).

I did see some commentary from Japanese sources about how these T-NISA funds are mostly in foreign securities (specifically calling out the S&P500 funds) and they would like people to invest in the Nikkei more (I really hope they don't do this).

[beanhead]

The abolition of Junior NISA was included as part of the 2020 tax reform, and while there is always the theoretical possibility it will be revived, the government's current plan makes no mention of it, nor has there been any indication from any other quarter that it will be continued beyond 2023. So unless something quite unexpected takes place -- not that that's absolutely impossible -- next year will be the last year for opening or adding to Junior NISA accounts. Once all pre-2024 accounts have run their course, under-18s will simply be out of luck.

This is the same as my understanding.
BUT, I believe the proposals being batted around include the lowering of the age for these `new-new-NISA' or 'combined NISA' accounts, don't they?
So there may be a possibility to keep investing for your kids, using the normal NISA. Maybe...

[ClearAsMud]

The only announced lowering of the NISA age I am aware of (I can't guarantee I haven't missed something, and unofficial proposals to keep Junior NISA around in some form no doubt exist and may yet be put forward) is from 19 to 17 in accordance with the lowering of the age of adulthood, which applies to new Junior NISA accounts being opened in 2023. Future regular and Tsumitate NISA accounts can be opened from 18, which is also a lowering of the age from the 20 minimum hitherto. Otherwise, I can't say I've seen a recent news report or major website that suggests any sort of substitute for Junior NISA is being seriously considered, including setting an age lower than 18 for opening a standard NISA account. But maybe someone has found a source they can point to that mentions that possibility? And as I've tried to emphasize, nothing has yet been set in stone. An outline has been drawn, but proposals do get revised before being presented to the Diet. Hope springs eternal...right?

What will become possible for under-18s from 2024 under the new proposal is cashing out of Junior NISA early and keeping any tax-free gains, with the provision that the withdrawal can only be total and not selective. I'm tempted to say that the idea here is to shorten the transition period to the new NISA -- i.e., reduce the number of legacy Junior NISA accounts as quickly as possible -- but in any case, the age limitation regarding when tax-free gains can be taken from Junior NISA is being eliminated. Rollovers from Junior NISA into the new NISA will also be possible upon reaching the age of 18.

[Edit: There was mention of extending Tsumitate NISA to minors in the original wish list submitted by the Financial Services Agency at the end of August, with Junior Tsumitate being abolished as a separate program. This submission of desired changes is the first major step in the annual tax-law revision process, other important milestones in which occur roughly in October (government tax commission meeting), December (ruling-party tax commission meeting, along with announcement of the official detailed proposal), February (submission of a bill to the Diet), March (Diet approval), and April (implementation). The December proposal (税制改正大綱) should be announced around the middle of the month -- coming soon -- after which only minor changes usually find their way into the cabinet-approved version and the MOF tweaked version that gets submitted to the Diet.]

[tnm611]

Hi everyone,
Just looking for some advice on the JNISA if possible.

I was just looking into opening one ASAP so that I could fund it for my daughter for this year's amount, and then again for next year's amount, before they end the scheme at the end of 2023, but then realised the government's new proposed updates to the Tsumitate NISA, which seems like it may be open to people of any age, including children...?

Is anyone able to advise on whether I should:
1) open the JNISA ASAP as planned, and fund it for the next two years; and/or
2) wait for the newly updated NISA to be released and then go with one of those for my daughter
?

Thanks in advance!