NISA change proposals

[TokyoBoglehead]

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!

1. Definitely, 1.

[RetireJapan]

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...?

This is not confirmed I believe, so if you have the funds investing in J-NISA is probably a wise choice, especially as it sounds as though it may be possible to roll J-NISA into a NISA account when the child reaches the age of 18.

[zeroshiki]

I'm sure everyone is on the edge of their seats for yet another update on this but reports are coming out that the government have more or less decided the direction they want to go and hold on to your seats, its still nothing we haven't heard of before. Basically the news is that they've decided Standard and Tsumitate is confusing so they'll merge them into 1 account, Tsumitate, BUT you can buy non-MF in a special "growth" allotment that they haven't decided. News also says the time period is more likely going to be infinite.

tl;dr nothing new, they're calling it merging both accounts to tsumitate but because of the "growth allotment" 成長枠 it sounds more like an expansion of the current standard NISA.

[TokyoBoglehead]

Zeros Source -> https://www.yomiuri.co.jp/economy/20221209-OYT1T50280/

This sounds like they took the old "New Nisa" and flipped around the two floors. I only have questions, and there seems to be no answers.

[RetireJapan]

My main questions: will this be unlimited duration? And, what is the annual contribution limit going to be?

Don't really care about the composition

[sutebayashi]

Seems from that screenshot that the normal NISA rollover is to go, but some kind of “lifetime” amount limit to be introduced. Seems that it is going to be more complicated than it could be, but that’s compromise committee decision making I guess.

Presumably the lifetime maximum will be an expansion of around double versus the existing 6 million… I guess those who have maxed out their NISA allocations already will get another bite at the cherry.

If one can max out that “growth allocation” from day one, then I suppose I would sell or shift (if possible) some of my growthy tokutei koza holdings into this new NISA.

Hopefully it does serve to boost investment amongst Japanese, rather than primarily give existing investors a bigger tax break (not a personal complaint, but I would like to see some policy that can help to boost Japan for Japan’s sake.)

[TokyoBoglehead]

s.

Presumably the lifetime maximum will be an expansion of around double versus the existing 6 million… I guess those who have maxed out their NISA allocations already will get another bite at the cherry.

If one can max out that “growth allocation” from day one, then I suppose I would sell or shift (if possible) some of my growthy tokutei koza holdings into this new NISA.

We cannot second guess our decisions of using a tsumitate, it was based of the best information we had at the time.

[Moneymatters]

Seems from that screenshot that the normal NISA rollover is to go, but some kind of “lifetime” amount limit to be introduced. Seems that it is going to be more complicated than it could be, but that’s compromise committee decision making I guess.

Presumably the lifetime maximum will be an expansion of around double versus the existing 6 million… I guess those who have maxed out their NISA allocations already will get another bite at the cherry.

Firstly, it seems like I’ve picked a hell of a time to quit drinking..

Good catch as during all the fanfare and speculation any talk of a lifetime limit didn’t get much attention despite there technically being one now(in the form of limiting how many years you can contribute).
To me personally this 生涯投資上限額 just cheapens the deal. But as it can be shown to hold back the dreaded 金持ち I can fully see this happening. Numbers of 1,600万 to 2,000万 and being thrown around online.

Just for fun, let’s imagine the new lifetime limit is 1,200万 and the annual limit is 120万 then you’re potentially maxed out in 10 years.

If you look at UK ISA data it’s clearly just those on high income that max the uk annual limit. But then the limit is much higher than Japan. https://www.gov.uk/government/statistic ... -june-2022

Chart 5 on that link.

I wonder if anyone can find similar clear and transparent data for Japan. It could be used as a basis to understand what lifetime limit they might pick.
For example. This new lifetime limit might be a number that a very average household might invest across 40 years.

I realize just looking at income alone doesn’t make sense as age likely has a significant effect on the amount of disposable income for the average family. But I just like speculating.. yes yes. I know the announcement is Thursday..

[RetireJapan]

Just for fun, let’s imagine the new lifetime limit is 1,200万 and the annual limit is 120万 then you’re potentially maxed out in 10 years.

Dislike

Thursday, you say?

[TokyoBoglehead]

Just for fun, let’s imagine the new lifetime limit is 1,200万 and the annual limit is 120万 then you’re potentially maxed out in 10 years.

Dislike

Thursday, you say?

https://news.yahoo.co.jp/articles/ce6f1 ... 463299dafa

The government and ruling party have decided to unify the two types of NISA (small amount investment tax exemption system), which currently allow investment trusts and other investment income to be exempt from taxation, into a single NISA centered on the Tsumitate NISA, with a lifetime investment limit of 15 million yen. The plan will be included in the ruling party's tax reform plan to be finalized in mid-December, and will be the centerpiece of Prime Minister Fumio Kishida's "Asset Income Doubling Plan.

　NISA is a special tax exemption program that allows investors to pay 20% tax-free on their investment income. Currently, there are two types of NISA: the "general type," which allows investors to invest in stocks as well, and the "savings type," which allows investors to invest only in low-risk investment trusts.

　The government and ruling party will unify the two types of systems in order to simplify the system and make it easier to use. The focus will be on the "savings type," which is considered to be suitable for long-term asset building. A "growth investment line" will be created to allow investment in stocks, retaining the functionality of the general type. The system will be made permanent, so that accounts can be opened at any time, and the tax exemption period will be indefinite.

投資信託などの運用益が非課税になるNISA（少額投資非課税制度）について、政府・与党は今は2種類あるNISAをつみたてNISAを軸に一本化し、生涯の投資上限額を1500万円にする方針を固めた。このうち750万円は株式投資に使える「成長投資枠」、年間投資上限額は120万円とする方向で最終調整する。12月中旬にまとめる与党税制改正大綱に盛り込み、岸田文雄首相が掲げる「資産所得倍増プラン」の目玉にする。

　NISAは、投資で得た利益にかかる20%の税金がゼロになる特例制度。現行では株式にも投資できる「一般型」と、低リスクの投信だけに投資できる「つみたて型」の2種類があり、どちらかを選ぶ。

　政府・与党は、制度をシンプルにして使いやすくするため、2種類の制度を一本化する。長期の資産形成に適しているとされるつみたて型を軸にする。株式投資ができる「成長投資枠」をつくり、一般型の機能を残す。いつでも口座を開設できるように制度を恒久化し、非課税期限も無期限にする。