RetireJapan

Hi all,

Happy New Year.

I'm slightly confused about any tax implications of having a UK bank account with a reasonable amount (in my eyes!) of money in it. I've tried to find a clear answer online and checking the forums, but can't see anything that specifically addresses the situation:

- Been in Japan 10 years
- Have around £75,000 in a couple of UK accounts with one bank
- Earn a small amount of interest each year (0.25% - 1%)

From reading up online, I wouldn't qualify for the overseas assets reporting law as I don't have anywhere near the JPY50m abroad, but do I need to be claiming the interest from the account on a Japanese tax return? If I should be doing this, are there likely to be any repercussions from not having done it so far if I explain the situation at the tax office and show I am trying to act in good faith by sorting it out?

Grateful for any advice.

Yes, you should be declaring it. Not sure how the tax office would deal with it if you go and do a mea culpa, may well depend who you talk to. They could go back a few years and charge the tax plus penalties. In your position I would be tempted to start declaring it from now, and if anyone subsequently wants to talk to you about the past, so be it.

I'm not a tax person, but I think there's an up-to-¥200,000 allowance that this might fall within. I think that's usually for some minor side income, a kind of miscellaneous category.

£75,000 x 1% is £750, convert to yen and you're still within that.

I'd go with the above comment--declare it this year, don't worry about past years unless someone asks.

captainspoke wrote: ↑Sat Jan 02, 2021 11:01 am I'm not a tax person, but I think there's an up-to-¥200,000 allowance that this might fall within. I think that's usually for some minor side income, a kind of miscellaneous category.

£75,000 x 1% is £750, convert to yen and you're still within that.

I'd go with the above comment--declare it this year, don't worry about past years unless someone asks.

That’s an interesting point about the 200k allowance. I am self-employed so don’t believe I can get away with not declaring any and all income but my missus is a ‘salary woman’, has about half the amount of the OP in a Uk bank account, and doesn’t declare the interest here due to laziness. That there may be a justification for her delinquency is both comforting and irritating

Thanks both - really helpful.

Wasn't aware of the JPY200,000 allowance, but I should be sitting on the right side of that - the majority of the money is in a 0.25% account, with a small amount getting 1% (£200 per month limit on funding the account).

The reason it came about is because I went to the tax office to ask how to claim the 30 dollars in dividend payments on my newly opened IB account. The chap was helpful and suggested I come back in February and he will help me fill it in, but it suddenly dawned on me that the interest on my UK accounts may also be applicable.

Will declare it this year as suggested and hope for the best.

This is a pesky issue indeed... I started getting lazy about it. No adverse effects experienced yet

Interest rates are dead low overseas now too, and you can pick up a few yens worth interest every month, but then the way you are supposed to report this income to the Japanese tax man involves converting the interest earned into yen (at which exchange rate? good luck finding a definitive answer to that!).

It's a big hassle to report these measly little yens worth of interest, so I stopped doing it, and just reported bigger chunkier interest earned over longer periods with a larger sum.
I also try now to not leave my cash lying around in an account, so as not to earn such pesky interest in the first place.
Strictly speaking it's supposed to be reported, but reporting it costs both parties more in time that it is worth.

sutebayashi wrote: ↑Sun Jan 03, 2021 12:54 pm...but then the way you are supposed to report this income to the Japanese tax man involves converting the interest earned into yen (at which exchange rate? good luck finding a definitive answer to that!).
....

I convert things to yen using the TTM rate for the specific date that anything occurred (e.g., interest payments).

I use this site: http://www.murc-kawasesouba.jp/fx/past_3month.php (recommended to me by the local tax office) Look up dates via the selections at the bottom. If there's no rate available (holidays here), use the next available previous date.

If you've got your paperwork handy, doing a year's worth (assuming 12 monthly interest payments) should take about 10 minutes.

I am in the process of doing this myself.

I have currently been in Japan for under 5 years but made a whopping £90.38 in interest this year in one of my UK bank accounts.

I am not certain if Interest from overseas bank accounts is considered foreign sourced income or not. However, I have moved all my money from the UK over to Japan now anyway so even though I have been here for under 5 years and should it be classed as foreign sourced income, I still need to declare it because I remitted it to Japan.

You have been here for over 5 years so you 100% have to declare it to Japan.

I think interest from bank accounts held overseas is still put under:

"金融・証券税制（利子" ( Financial / securities tax system (interest) >
"２　国外で支払われる預金等の利子など国内で源泉徴収されないもの等に関する事項（総合課税の対象" (2Matters concerning matters that are not withheld domestically, such as interest on deposits paid overseas (subject to comprehensive taxation)

My Question with this is the exchange rate. Does the NTA have their own set exchange rate for GBP to JPY? Or do I just use the current real-time rate?

If anyone knows that would be great because currently filling out the E-Tax form as we speak.

Chris wrote: ↑Tue Jan 05, 2021 1:14 am...
My Question with this is the exchange rate. Does the NTA have their own set exchange rate for GBP to JPY? Or do I just use the current real-time rate?

If anyone knows that would be great because currently filling out the E-Tax form as we speak.

captainspoke wrote: ↑Sun Jan 03, 2021 1:58 pm...convert things to yen using the TTM rate for the specific date that anything occurred (e.g., interest payments).

I use this site: http://www.murc-kawasesouba.jp/fx/past_3month.php (recommended to me by the local tax office) Look up dates via the selections at the bottom. If there's no rate available (holidays here), use the next available previous date. ...

GBP is the fourth row down there...

Thanks, I did see your link and decided to go with that rate for the 14th of December 2020, the date of which the Interest was actually obtained in the UK bank account.

So I have just added that based on that exchange rate form your link onto my Final Tax Return, printed it and about to go to the tax office to submit it (I cannot do my usual electronic submission because I have iDeCo and Furosato Nozei paper work to go with it too).

My main worry is I can just foresee the NTA turning around with teeth sucking and being like - "This is not the exchange rate we assigned! Please use this one... blah blah blah"

Oh P.S - E-Tax is now up and running as of yesterday (4th of January 2021)

Update: Just submitted. Tax office guy did not seem to mind about the exchange rate I applied. Keep in mind my Japanese is low at best so I could not really explain it. So will see if they contact me at a later date about that. But overall no trouble with physical submission which was a nice result If anything the Tax Office guy seemed really impressed I had everything all documented with proof for iDeCo, Furusato Nozei, miscellaneous income and this overseas interest income.