RetireJapan

Sorry for hogging this forum, but I run into one thing after another that makes no sense. Such as the following:

Spousal credit. That is, no Japanese inheritance tax will be imposed on amounts that the spouse receives up to the greater of: (1) the spouse's statutory share of the total taxable assets, and (2) JPY 160 million. 7 The statutory share of the spouse will be one-half if the decedent is also survived by children.

What is that all about? I don't understand the words "statutory share" (or know the Japanese equivalent). Since she is the only beneficiary, won't her statutory share be 100 percent of the assets being inherited?

needhelp wrote: ↑Tue Apr 23, 2024 8:49 am Sorry for hogging this forum, but I run into one thing after another that makes no sense. Such as the following:

Spousal credit. That is, no Japanese inheritance tax will be imposed on amounts that the spouse receives up to the greater of: (1) the spouse's statutory share of the total taxable assets, and (2) JPY 160 million. 7 The statutory share of the spouse will be one-half if the decedent is also survived by children.

What is that all about? I don't understand the words "statutory share" (or know the Japanese equivalent). Since she is the only beneficiary, won't her statutory share be 100 percent of the assets being inherited?

https://www.retirejapan.com/blog/japane ... nce-taxes/


https://retirewiki.jp/wiki/Inheritance_tax


法定相続人 の 法定相続分
Hotei Souzoku Nin no Hotei Souzoku Bun

Statutory Shares for calculation of the Total Amount of Tax on the Estate

If Spouse and Child(ren) - Spouse 50% and 50% divided between Child(ren)

If no children

If Spouse and Parent(s) - Spouse 66% and 33% divided between Parent(s)

If no parents

If Spouse and Sibling(s) - Spouse 75% and 25% divided between Sibling(s)

If no Siblings

If only Spouse - Spouse 100%

etc...


55 Patterns of Statutory Heirs

https://souzoku-pro.info/columns/isanbunkatsu/10/


The Statutory Shares are used for Calculating the actual amount of Tax on the Estate.
The Estate is then distributed to the Heirs and other Beneficiaries and Legatees and the Inheritance distributed in proportion to each's portion of the estate.
There are then various Credits, and finally, if the Beneficiaries and Legatees are not direct relatives of the deceased, a Surtax of 20% of the Tax amount.

I still don't get it. Does that mean that my wife, my only heir or beneficiary, will not be taxed on any inheritance she gets from me when I die? Because her statutory share is 100 percent? That seems to contradict everything else I ever read on this matter.

needhelp wrote: ↑Tue Apr 23, 2024 5:55 pm I still don't get it. Does that mean that my wife, my only heir or beneficiary, will not be taxed on any inheritance she gets from me when I die? Because her statutory share is 100 percent? That seems to contradict everything else I ever read on this matter.

As long as it is under 160m

needhelp wrote: ↑Tue Apr 23, 2024 5:55 pm I still don't get it. Does that mean that my wife, my only heir or beneficiary, will not be taxed on any inheritance she gets from me when I die? Because her statutory share is 100 percent? That seems to contradict everything else I ever read on this matter.

If your wife receives an amount which is above the regular deduction (JPY 30M + JPY 6M per statutory heir) and the inheritance would then become taxable, then she can apply for the special deduction (souzoku haiguusha Kokujo) of JPY 160M. She would need to apply for this one, it's not automatic. And if she ends up using this special deduction, then she will need to do the tax return for inheritance, even if the amount due is 0.

The spouse credit is the greater of 160M or the Statutory Spouse Share of the Tax on the Estate,

So if for example, there are Statutory Heirs for the Tax Calculation of Spouse and 2 children, the Statutory Shares are 50% for the Spouse Statutory Share and 25% each for the Children's Statutory Shares.

In this case, after calculation of the Tax, the Spouse will receive the Spouse Tax Credit and can receive upto 50% (The Spouse Statutory Share, no matter how large that is) of the Estate Tax Free, or a larger % portion of the Estate if the estate is small and the total assessed tax on that portion of the estate is less than 160M...
The Spouse could receive the Spouse Credit and receive 100% tax free if the Spouse is the only Statutory Heir, or if the total Inheritance Tax assessed on the estate is less than ¥160M.
The taxman will get it in the end...

Tkydon wrote: ↑Wed Apr 24, 2024 3:17 am The spouse credit is the greater of 160M or the Statutory Spouse Share of the Tax on the Estate,

So if for example, there are Statutory Heirs for the Tax Calculation of Spouse and 2 children, the Statutory Shares are 50% for the Spouse Statutory Share and 25% each for the Children's Statutory Shares.

In this case, after calculation of the Tax, the Spouse will receive the Spouse Tax Credit and can receive upto 50% (The Spouse Statutor Share, no matter how large that is) of the Estate Tax Free, or a larger % portion of the Estate if the estateis small and the total assessed tax on that portion of the estate is less than 160M...
The Spouse could receive the Spouse Credit and receive 100% tax free if the Spouse is the only Statutory Heir, or if the total Inheritance Tax assessed on the estate is less than ¥160M.
The taxman will get it in the end...

Not if the spouse spends it all

RetireJapan wrote: ↑Wed Apr 24, 2024 6:10 am

Tkydon wrote: ↑Wed Apr 24, 2024 3:17 am The spouse credit is the greater of 160M or the Statutory Spouse Share of the Tax on the Estate,

So if for example, there are Statutory Heirs for the Tax Calculation of Spouse and 2 children, the Statutory Shares are 50% for the Spouse Statutory Share and 25% each for the Children's Statutory Shares.

In this case, after calculation of the Tax, the Spouse will receive the Spouse Tax Credit and can receive upto 50% (The Spouse Statutor Share, no matter how large that is) of the Estate Tax Free, or a larger % portion of the Estate if the estateis small and the total assessed tax on that portion of the estate is less than 160M...
The Spouse could receive the Spouse Credit and receive 100% tax free if the Spouse is the only Statutory Heir, or if the total Inheritance Tax assessed on the estate is less than ¥160M.
The taxman will get it in the end...

Not if the spouse spends it all

10% Consumption Tax