RetireJapan

Hello,

I have a bit of a complicated situation (in my mind, at least) and would appreciate any advice.

I received an inheritance a while ago and have done all of the usual max'ing-out of NISA (so far), as well as max-out my kids' Junior NISAs.

I have put the rest of the inheritance mostly into the eMaxis Slim All-Country, which has been doing well since I made the large investment.

However, I am running into the following:

I wanted to "gift" my kids 1m each year and invest that into their own investment accounts (eMaxis Slim All-Country). However, after transferring the money into their accounts a few months ago, I came to realize (with a couple of phone calls to their bank) that they are not eligible to invest into that fund...

I did some poking around on the bank's website to see if there is an equivalent, or decently-growing fund available to them with similarly low expense ratio, but could not find anything to my liking.

So, I transferred their cash back into my own account and am thinking of just slapping that into the current, taxable investment of eMSAC (which is the inheritance investment) and giving them the cash (with growth minus tax) later-on.

Here is where I need advice:

Since the initial inheritance investment has done well so far (it has made 3m since I invested into it woohoo), I was thinking of taking some profits, as I could use the cash to help start-up a business I have been planning. I would maybe take 2~3m profits (of course, paying the 20% tax, too). I was considering doing this before my kids' predicament came up.

Since I am also wanting to invest the 2m of the kids' money into the same investment, should I

1/ just keep the kids' cash, instead of taking profits from the current investment?
or
2/ take the profits from the investment, pay the tax, then invest the 2m of the kids' cash back into the investment?

I am thinking 2/ would be taking steps backwards, as, the average purchase price of the inheritance investment is much lower than the current price of eMSAC. If I were to use the kids' 2m to re-purchase shares of eMSAC right now, we'd be buying less shares for the same money... but does that even matter? (I'm thinking number of shares doesn't matter, just the price-per-share.) Also, not to mention the fact that I'd be losing 20% if taking profits to pay the tax.

I am leaning more towards 1/ (keeping the kids' cash for my business), then marking on my tracking spreadsheet 2m of the inheritance investment is theirs, at today's eMSAC price.

If you have any other options, please do share! And please correct my assumptions, if any of it seems silly.

Thank you!

cocacola wrote: ↑Mon May 13, 2024 7:40 am
I wanted to "gift" my kids 1m each year and invest that into their own investment accounts (eMaxis Slim All-Country). However, after transferring the money into their accounts a few months ago, I came to realize (with a couple of phone calls to their bank) that they are not eligible to invest into that fund...

I invest in the eMaxis Slim All-Country fund in both of my children's regular accounts now that the JNISA is no more...
No issues at all.

Bushiman wrote: ↑Mon May 13, 2024 11:44 pm
I invest in the eMaxis Slim All-Country fund in both of my children's regular accounts now that the JNISA is no more...
No issues at all.

What bank/institution are your kids' regular accounts with?

We made bank accounts for the kids specifically at MUFG in order to purchase the eMSAC easily, but it's not possible to purchase shares of that online... you have to actually go to the physical branch in order to make purchases, which is such a pain in the ass. the eMaxis lineup is an MUFG product, so you would assume that it would be easy as pie to purchase them from an MUFG bank account, but they make it so difficult. Welcome to Japan, I guess.

This is why I transferred the cash to my own, personal Monex account, as it's so simple to make purchases of a plethora of different products there.

cocacola wrote: ↑Tue May 14, 2024 12:45 am
What bank/institution are your kids' regular accounts with?

We made bank accounts for the kids specifically at MUFG in order to purchase the eMSAC easily, but it's not possible to purchase shares of that online...

General advice is to use one of the large online brokers. They let adults set up accounts for kids.
Ours are at Rakuten but Monex should also be able to support accounts for your children.

beanhead wrote: ↑Tue May 14, 2024 1:44 am

cocacola wrote: ↑Tue May 14, 2024 12:45 am
What bank/institution are your kids' regular accounts with?

We made bank accounts for the kids specifically at MUFG in order to purchase the eMSAC easily, but it's not possible to purchase shares of that online...

General advice is to use one of the large online brokers. They let adults set up accounts for kids.
Ours are at Rakuten but Monex should also be able to support accounts for your children.

Exactly. Ours are all set up with Rakuten...

cocacola wrote: ↑Tue May 14, 2024 12:45 am This is why I transferred the cash to my own, personal Monex account, as it's so simple to make purchases of a plethora of different products there.

My kids have accounts with Monex, it’s possible.

Well, gosh darn it... I will look into creating accounts at Monex for my kids. It will beat having to keep track of things on a spreadsheet.

Thanks for the advice on this. Through the MUFG online banking portal, there are a couple of options to invest, but they don't allow anyone under 18 to partake. This is why I figured that other institutions may have this minimum age limit, as well.

I'll look into the Monex route, as that is the interface that I'm used to (although, it's a Japanese-style pizza of a website).

Thanks again.

If you transfer assets, you have to account for them, calculate the capital gain, and pay capital gains tax, and if over the Gift tax Threshold, the child would have to pay pay Gift Tax, as if you had sold the assets, paid the Capital Gains Tax, transferred the cash, paid Gift Tax, and then repurchased the assets

cocacola wrote: ↑Tue May 14, 2024 2:40 am Well, gosh darn it... I will look into creating accounts at Monex for my kids. It will beat having to keep track of things on a spreadsheet.

Thanks for the advice on this. Through the MUFG online banking portal, there are a couple of options to invest, but they don't allow anyone under 18 to partake. This is why I figured that other institutions may have this minimum age limit, as well.

I'll look into the Monex route, as that is the interface that I'm used to (although, it's a Japanese-style pizza of a website).

Thanks again.

I had the exact same problem. With MUFJ, you need to make an appointment and go into a branch to buy funds for the junior accounts.
I made an appointment, they called up to confirm what I wanted and then advised me to go elsewhere as
1. the process takes roughly 2-3 hours to do
2. The emaxis range is an online only offering, so not an option if you go down in person.

cocacola wrote: ↑Tue May 14, 2024 2:40 am Well, gosh darn it... I will look into creating accounts at Monex for my kids. It will beat having to keep track of things on a spreadsheet.

Oh shit. I’ve just realized that after 8 hours slaving over spread sheets for work I’m increasingly using excel to track all manner of personal stuff. Not just finances but house electrical consumption, car “fuel” consumption, now solar production. Just checked and yep. I’ve pasted in a screen shot of my Tepco contract page. WT Actual F..
Obviously it’s too late for me. Let this be a warning to you all!
Not to be overly dramatic but, and to paraphrase, “I am become Excel. Destroyer of Word.”