RetireJapan

Hello,

I have received gift money from family living in Europe and just realized that any amount above 110万円 will be taxed 10%.
After seeing that I asked my family to wait until next year for the remaining amount to minimize taxes.
I have already received about 300万円 so about 190万円 will be taxed.
My question is, is there a way to avoid being taxed or is it too late?
Not looking at doing anything shady, I'm happy to pay my fair share but...

Thank you

Michel wrote: ↑Thu Aug 04, 2022 1:33 pm Hello,

I have received gift money from family living in Europe and just realized that any amount above 110万円 will be taxed 10%.
After seeing that I asked my family to wait until next year for the remaining amount to minimize taxes.
I have already received about 300万円 so about 190万円 will be taxed.
My question is, is there a way to avoid being taxed or is it too late?
Not looking at doing anything shady, I'm happy to pay my fair share but...

Thank you

I don't know much about this, but I wonder if the money could be split and gifted to your kids, wife? That's the only thing I can think of.

Well technically you have received the gift so are liable. Without being ‘shady’, that is the situation. However there are many grades of shady and I think Bubblegun’s suggestion has merit if applicable. Also it may be possible to finesse by treating it as a family loan to be paid back. Are you planning to use said gift for a property purchase? If so, I believe exemptions may apply.

Actually we recently bought a new apartment and was planning on using most of it to pay the mortgage.

My current situation is a little tricky I think as the loan is under my partner's name. We are not yet married but will be in September (we don't have kids)

Beaglehound wrote: ↑Thu Aug 04, 2022 3:10 pm Well technically you have received the gift so are liable. Without being ‘shady’, that is the situation. However there are many grades of shady and I think Bubblegun’s suggestion has merit if applicable. Also it may be possible to finesse by treating it as a family loan to be paid back. Are you planning to use said gift for a property purchase? If so, I believe exemptions may apply.

https://money-bu-jpx.com/news/article039707/

gifts of funds for housing acquisitions (until December 31, 2023)
When a direct ascendant, such as a parent or grandparent, gives a gift to a child or grandchild for the purpose of building or acquiring a house, or expanding or renovating a house, the gift tax is not imposed up to a certain amount.

The tax-exempt gift amount under the tax exemption system for gifts of funds for housing acquisition, etc. is

・Up to 10 million yen for
energy-saving housing ・Up to 5 million yen for non-energy-saving housing

●Requirements for using the tax exemption system for donations of funds for housing purchases, etc.

In order to use the tax exemption system for donations of funds for housing purchases, etc., the following requirements must be met.

(1) The recipient (child or grandchild) must be 18 years of age or older
(2) The income of the recipient (child or grandchild) in that year is 20 million yen or less 10 million yen or less if the floor area of ​​a residential house is 40 m2 or more and less than 50 m2
) (3) Return of gift tax from 2009 (Heisei 21) to 2021 (4) The house was not
acquired from someone with a special relationship, such as a spouse or relatives.
(5) The year after receiving the gift of the house. Live in the house by March 15th (or be sure to live in it after that date)

Thank you very much, this seems to be it. I am planning to contact my account and see if he has any extra information. I will bring this bit of information to his attention hoping he will be able to do something.

Michel wrote: ↑Thu Aug 04, 2022 4:12 pm Thank you very much, this seems to be it. I am planning to contact my account and see if he has any extra information. I will bring this bit of information to his attention hoping he will be able to do something.

Good luck! This kind of procedure usually requites some serious paperwork. Please report back, I do not know of anyone who has actually done it!

Michel wrote: ↑Thu Aug 04, 2022 4:12 pm Thank you very much, this seems to be it. I am planning to contact my account and see if he has any extra information. I will bring this bit of information to his attention hoping he will be able to do something.

Please let us know the outcome as many of us are in the same boat or will be with gifts and inheritance from abroad.

Will do! I was told to go to the tax office and ask there. I'll keep you posted on the procedure.

Michel wrote: ↑Thu Aug 04, 2022 3:31 pm Actually we recently bought a new apartment and was planning on using most of it to pay the mortgage.

My current situation is a little tricky I think as the loan is under my partner's name. We are not yet married but will be in September (we don't have kids)

It's important to note that if you are not the registered owner of the property, you cannot claim the deduction. It is a gift to a direct descendant specifically for the purpose of enabling that descendant to buy the property. Partial ownership qualifies, but a partner or even a spouse cannot benefit from a gift from the other spouse's parents to buy housing.

In addition to the basic information already provided, other important points include:

1. The deduction can be applied to both land and house, but not to land alone. A house (including a planned house or manshon) is part of the deal.
2. Floorspace must be between 40 sqm and 240 sqm.
3. A gift-tax return must be filed between February 1 and March 31 of the year following receipt of the gift. This return must be filed even when no gift tax is due. The tax ofice will check ownership through the property number supplied on the return. Documentation will include a copy of the purchase contract and evidence that the gift is in fact from a direct ascendant. For Japanese nationals, the family register serves as proof; it is not clear how relationships between non-Japanese donors and donees would be demonstrated (birth certificates? affidavits?).