RetireJapan

Hi.

My spouse is Japanes. I'm Canadian and live in Canada (spouse has always retained JP citizenship). I've lived in Japan previously, working at a multinational in Tokyo. I've also visited Japan about a dozen times (I'm mentioning all this to say that I'm reasonably familiar with Japan / life in Japan). Spouse is from Tohoku region.

We are thinking of retiring to Japan and/or I'd secure my final pre retirement job in Japan (if I can), around 5 to 8 yrs prior to my retirement, and sort of ride that until I feel like retiring. I'm early 50s. So that means maybe in 5 yrs or so for last job, which coincides with my kids being done school here in Canada.

Has anyone else done this - retire from abroad to Japan or taken their last gig in Japan and ridden that into retirement? If so, what are the considerations?

I was thinking something like this:

* buy house or condo for cash (based on selling my house in Canada). To avoid mortgage complications.

* keep my retirement savings in Canada and bring over a chunk every year perhaps to avoid some taxes.

* keep other assets in Canada (I have an investment property / rental house in Canada). I also have an employer pension plan. To avoid inheritance tax issues.

* health insurance TBD (I'm at the start of my research)

* other tax considerations TBD (I'm at the start of my research)

Anyway, any thoughts on this? The other option would he to do a split life between Japan and Canada sort of 50 50 until I'm too old to do this any longer.

No experience with this personally.

One thing to be careful with is your country of residence for tax purposes. The NTA here will decide if you are resident, rather than you making that decision. The Japan Finance sub on reddit has some good information in this area. I have seen similar discussions there before.

I'm from Switzerland and not from Canada, but I have also plans to move to Japan upon retirement. I posted about that a while ago:
viewtopic.php?f=9&t=1232&p=10485
Canada's agreements with Japan on social security and taxes should all be publicly available information. I was able to find most of what I needed on the Swiss government's website. It wasn't easy to understand though. The information on the taxation of pension payments etc. that other users posted in my thread might interest you.

I'm pretty much doing this right now except other than savings I have no other assets in the UK. I'm 51 and moved back here last year. My plan is to buy a house with savings (currently looking), pick up some part-time work (teaching English at unis 2.5 days a week from April), live off that and savings and gradually transfer most UK savings to Japan to hopefully smooth out exchange rate fluctuations making some investments here (currently at the beginning of that process but need to get a move on).
I figured I'd pay into the national pension here for the minimum 10 years giving me 1/4 of a full pension along with my UK full pension and several private pensions I have which will/can kick in at various times from 55-68. The timing of Japanese pension payments is something you may want to look into - I'm not sure what happens if you arrive at say 58.
Health insurance is the national one based on income so no issues there.

With the generous help of members of this forum I'm gradually making my way through the tax payments related to doing bits of UK work and the like.

Short answer though - totally doable and a great place to live and retire IMHO. Once we're settled and after Covid we may spend a month or two in the summer in the UK each year - not sure yet.

steford wrote: ↑Tue Mar 08, 2022 8:38 am I'm pretty much doing this right now except other than savings I have no other assets in the UK. I'm 51 and moved back here last year. My plan is to buy a house with savings (currently looking), pick up some part-time work (teaching English at unis 2.5 days a week from April), live off that and savings and gradually transfer most UK savings to Japan to hopefully smooth out exchange rate fluctuations making some investments here (currently at the beginning of that process but need to get a move on).
I figured I'd pay into the national pension here for the minimum 10 years giving me 1/4 of a full pension along with my UK full pension and several private pensions I have which will/can kick in at various times from 55-68. The timing of Japanese pension payments is something you may want to look into - I'm not sure what happens if you arrive at say 58.
Health insurance is the national one based on income so no issues there.

With the generous help of members of this forum I'm gradually making my way through the tax payments related to doing bits of UK work and the like.

Short answer though - totally doable and a great place to live and retire IMHO. Once we're settled and after Covid we may spend a month or two in the summer in the UK each year - not sure yet.

Good info - I'm around the same age. I'm hoping once my kid is in university, in about 3 yrs, that I'd try to land a decent gig back in Japan, and ride that one into the sunset. Housing is way cheaper in Japan than Canada (I'm close to Vancouver), and I'm hoping to take advantage of that cost disparity. Even Kanty / Tokyo is cheaper than my home city in terms of housing. If I can push the distance a bit, and get a place a bit further out I'll be golden. Plan "B" would be to move to a mid-size city and avoid Tokyo altogether. Plan "C" would be to do a split year between Canada and Japan, if that's doable financially, and if from a tax perspective that were better. Though seems a bit unsettled.

In the meantime, I'm working hard to understand tax implications, how to get monthly middle class level income into Japan from Canadian assets and pensions, and minimize tax implications.

nekomata wrote: ↑Sat Feb 26, 2022 10:27 am I'm from Switzerland and not from Canada, but I have also plans to move to Japan upon retirement. I posted about that a while ago:
viewtopic.php?f=9&t=1232&p=10485
Canada's agreements with Japan on social security and taxes should all be publicly available information. I was able to find most of what I needed on the Swiss government's website. It wasn't easy to understand though. The information on the taxation of pension payments etc. that other users posted in my thread might interest you.

Thanks for the link, I'm going to check it out....looks interesting!

All Tax Treaties are located here

https://www.mof.go.jp/english/policy/ta ... st_en.html

Generally speaking, you should find (though not all)

Article 10 - Dividend Income
Tax is payable in the Source Country, though under a reduced rate under the treaty
You can choose to report Dividends under the Aggregate Taxation Method at your Marginal Tax Rate and 10% Residents' Taxes (Form B - Pages 1&2), or under the Separate Taxation Method at 20.315% Dividend Tax Rate (15% National, 0.315% Reconstruction and 5% Residents' Taxes (Form B - Pages 1&2 And Page 3 第三表)).
Any Taxes paid in the Source Country can be claimed back as the Foreign Tax Credit (Form B - Pages 1 - Item 46)

Article 11 - Interest Income
Tax is payable in the Source Country, though under a reduced rate under the treaty
Interest Income can only be reported under the Aggregate Taxation Method at your Marginal Tax Rate and 10% Residents' Taxes (Form B - Pages 1&2).
Any Taxes paid in the Source Country can be claimed back as the Foreign Tax Credit (Form B - Pages 1 - Item 46)

Article 17 - Pension Income
Under Japanese Tax Law, Lump Sum Retirement Bonus 退職金, Regular Pension Income from Public Pensions and Certain Private Pensions, and Regular Pension Income from Annuities are treated differently.
Many Treaties state that the Regular Pension Income from Public Pensions and Certain Private Pensions, and Regular Pension Income from Annuities are only taxable in the Country of Residence.
Some also apply taxes in the Source Country.
Any Taxes paid in the Source Country can be claimed back as the Foreign Tax Credit (Form B - Pages 1 - Item 46)

To claim reduced levels of Withholding in the Source Country, you will have to submit a Request for Reduced Rate of Withholding in that country.
Check the Web Site for Tax Agency in that country.

US - W8-BEN for Non-Resident Aliens

Aus - You would have to register in Australia as a Non-Resident for Tax Purposes.
https://www.ato.gov.au/business/payg-wi ... ts/?page=5
https://www.ato.gov.au/individuals/work ... variations
https://www.ato.gov.au/Forms/PAYG-withh ... plication/

Canada - You would have to register in Canada as a Non-Resident for Tax Purposes.
https://www.canada.ca/en/revenue-agency ... e-tax.html
https://www.canada.ca/en/revenue-agency ... P141_13999
https://www.canada.ca/en/revenue-agency ... P389_51139

etc..

I'm new to this site. I really like this forum, it is incredibly interesting and threads such as these are very helpful for those of us considering retirement in Japan.

I am in a similar position to those on this thread. I am a US citizen. My wife is a Japanese citizen (PR in US.) We are roughly three years away from retirement and a possible move back to Japan.

I have a few twists that I'd like to add to this conversation. It is clear that questions of this magnitude need to be discussed with a lawyer. For the time being, however, I am simply trying to educate myself on what items need to be considered when thinking about this type of move. I also look forward to sharing my experiences to try and help others in this position make more educated decisions.

#1 - Gift taxes and the best way to take title on a property in Japan. My wife and I have joint accounts in the US and we each own half of our assets. When we fund a real estate purchase how does one go about taking title and avoiding gift taxes? i.e., do couples generally take the title jointly - or is it more common to put the property in the name of the Japanese citizen. In the latter case, how do these couples go about avoiding gift tax as, technically speaking, half of the money was gifted for the property? On the other side of the coin, are there any negative impacts that could arise from taking the title jointly? Also, is there a way to fund a property purchase directly from a joint bank account in the US? Is it possible to wire funds from the US into an escrow account for the purchase?

#2 - Capital gains taxes while residing Japan prior to the 5 year mark for permanent resident tax purposes. Suppose I sell investments sourced in the US after arriving in Japan but prior to the 5 year mark. If those sales transpire prior to the five year mark in Japan will Japan levy taxes on those gains?

#3 - Estate tax. We have no children. Assume we are tax residents of Japan and one of passes away while we have investments and properties in both the US and Japan. If one of us passes away what taxes will be due? Will the surviving spouse be required to pay Japanese estate taxes on the entire global estate at the time of death, or is there some type of exclusion or trust that would postpone this until both of us have passed? The US has an unlimited estate tax deduction for surviving US citizens and resident green card holder spouses. There is also a QDOT that could potentially hold property and help defer taxes until the death of the surviving spouse. What is the situation in Japan?

#4 - Does anyone have any experience with a government funded pension/401k (i.e., employed directly as a US government employee and then retired in Japan.) This is my case, and it appears to me that I would have to be a resident AND a citizen of Japan for my pension/401k disbursements to be taxed in Japan. I'm curious if I'm reading the US Japan Tax Treaty correctly and if the Japanese tax authorities will truly honor this point. The usual case seems to be that one pays tax in the source country and then applies a credit towards tax due in Japan. Again, I might be misreading this, but I am curious if there would truly be zero tax due on my US funded pension in Japan so long as I do not become a national of Japan.

Japan - US Tax Treaty Article 18, 2.
(a)
Any pension and other similar remuneration paid by, or out of funds to which
contributions are made by, a Contracting State or a political subdivision or local
authority thereof to an individual in respect of services rendered to that Contracting
State or a political subdivision or local authority thereof, other than payments made by
the United States under provisions of the social security or similar legislation, shall be
taxable only in that Contracting State.
(b)
However, such pension and other similar remuneration shall be taxable only in
the other Contracting State if the individual is a resident of, and a national of, that other
Contacting State.

Thank you for any advice or insight. I look forward to continuing this conversation, sharing our stories and adding depth to these important details revolving around retirement and immigration.