RetireJapan

Hello.

I have just read an article in Japanese that says that if I invested in Tsumitate Nisa around the middle of the year and have only invested 200,000 yen not completing 400,000, there will be a tax incurred? Is it true?

Do I have to start by January?

If I were to invest in July, I will have to invest 60,000 yen + a month than 30,000 yen to complete the 400,000 yen a year for tax exemption.
Correct me if I am wrong because as far as I know, I can invest money of 33,333 yen when it's time to buy.

moly wrote: ↑Tue Sep 08, 2020 1:20 pm if I invested in Tsumitate Nisa around the middle of the year and have only invested 200,000 yen not completing 400,000, there will be a tax incurred? Is it true?

I don't think so. It would be helpful if you shared the article.

The article might be saying that you will 'lose' your tax-free allowance by not using it all. I have not heard about any punishment taxes associated with tsumitate NISA and in fact it is designed to be flexible and allow people to invest as much as they want to.

moly wrote: ↑Tue Sep 08, 2020 1:20 pm Hello.

I have just read an article in Japanese that says that if I invested in Tsumitate Nisa around the middle of the year and have only invested 200,000 yen not completing 400,000, there will be a tax incurred? Is it true?

Do I have to start by January?

If I were to invest in July, I will have to invest 60,000 yen + a month than 30,000 yen to complete the 400,000 yen a year for tax exemption.
Correct me if I am wrong because as far as I know, I can invest money of 33,333 yen when it's time to buy.

If you start your Tsumitate NISA later in the year you can invest OVER the 33,333yen limit.

Tsumitate NISA allows you to make up the difference, so your total contributions can equal 400,000yen. However, this is optional. You do not have to invest any more or less than you want to.

Example: Here is what my current monthly NISA contribution is.

eMAXIS Slim 全世界株式(オール・カントリー)

口座区分 つみたてNISA
分配金コース 再投資型
積立金額 76,191円

By December my total contribution will be 400,000yen.

What broker are you using? They should have the option to add more money monthly to make up the difference.

Note: There is no "punishment" invest as much or as little as you like up to 400,000 yen.

I have been trying to find the article I've just read. It was suggested by google app to me randomly perhaps I misunderstood the context.

Thank you. Maybe the article was talking about losing my tax-free allowance by not using it. I was a bit confused.

RetireJapan wrote: ↑Wed Sep 09, 2020 2:49 am The article might be saying that you will 'lose' your tax-free allowance by not using it all. I have not heard about any punishment taxes associated with tsumitate NISA and in fact it is designed to be flexible and allow people to invest as much as they want to.

Thank you. I opened an account using Rakuten. I have not put any money yet. I was planning to start by November but I am afraid that I might lose my free tax allowance.

Kanto wrote: ↑Wed Sep 09, 2020 3:41 am

moly wrote: ↑Tue Sep 08, 2020 1:20 pm Hello.

I have just read an article in Japanese that says that if I invested in Tsumitate Nisa around the middle of the year and have only invested 200,000 yen not completing 400,000, there will be a tax incurred? Is it true?

Do I have to start by January?

If I were to invest in July, I will have to invest 60,000 yen + a month than 30,000 yen to complete the 400,000 yen a year for tax exemption.
Correct me if I am wrong because as far as I know, I can invest money of 33,333 yen when it's time to buy.

If you start your Tsumitate NISA later in the year you can invest OVER the 33,333yen limit.

Tsumitate NISA allows you to make up the difference, so your total contributions can equal 400,000yen. However, this is optional. You do not have to invest any more or less than you want to.

Example: Here is what my current monthly NISA contribution is.

eMAXIS Slim 全世界株式(オール・カントリー)

口座区分 つみたてNISA
分配金コース 再投資型
積立金額 76,191円

By December my total contribution will be 400,000yen.

What broker are you using? They should have the option to add more money monthly to make up the difference.

Note: There is no "punishment" invest as much or as little as you like up to 400,000 yen.

As far as I understand it, the tsumitate NISA system is as follows:
1) You can put in up to 400,000 yen in one year with set monthly contributions (although you can set higher contributions in certain months if you want to save more when you get your summer/winter bonus)
2) If you join midway through the year, some banks will let you pay extra for the remainder of the year so that you can use up the full 400,000 allowance for that year
3) Each year's contributions are tax-free for 20 years from the year in which they are made
4) You can make contributions from 2018 until 2037 under the current system, so in theory someone who started their tsumitate NISA in 2018 could invest up to 8,000,000 in total over 20 years, whereas the maximum for someone starting this year would be 7,200,000 unless the system is extended beyond 2037

Based on the above, the best option seems to be to start this year and increase your contributions for the remainder of the year to use up the full allowance of 400,000. If you don't have much extra money to invest, the second best option would be to just contribute what you can afford each month and not worry about reaching the 400,000 limit. There doesn't seem to be any benefit in waiting until next year to start.

taneandy wrote: ↑Tue Sep 15, 2020 4:57 am 4) You can make contributions from 2018 until 2037 under the current system, so in theory someone who started their tsumitate NISA in 2018 could invest up to 8,000,000 in total over 20 years

Great summary, thank you! They just announced tsumitate NISA would be extended by five years until 2043 (and of course, that is the deadline for paying in, those years will then be tax-free for twenty years going forward).