RetireJapan

Hi guys,

Hope you’ve had a nice long weekend.

Me and my young son have recently received large remittances (gifts) from my mother in the UK, so next year I will be filing gift tax returns for me and him. I would like to ask you:

1) If you have experience using an accountant to file gift taxes, is there one you can recommend?
2) What sort of paperwork did you submit to prove that they are a gift?

I can imagine that one would need to employ sb who is knowledgeable about overseas matters.
Currently I am thinking of submitting my birth certificate (proof of connection with my mother, as recommended to me by the tax office), my mother’s account statements (shows provenance of funds) and possibly copies of the gift contracts made with her.

You can just do to the local National Tax Office, were you would file your Kakutei Shinkoku and they will help you file.

The value of the gift is converted to JPY at the Exchange Rate at the time

https://www.nta.go.jp/english/taxes/ind ... /12017.htm

https://www.murc-kawasesouba.jp/fx/past_3month.php

You have to list all the gifts received in the year.
Duduct the Annual Gift Allowance or Y1.1M
and pay Gift Tax on the excess.

Tkydon, greatly appreciate your advice and thank you for the links.
However, I will be looking to file them with a tax accountant given the amount of the remittances involved and some other details I plan to discuss with them.

IloveJapan wrote: ↑Wed Oct 16, 2024 1:57 pm Tkydon, greatly appreciate your advice and thank you for the links.
However, I will be looking to file them with a tax accountant given the amount of the remittances involved and some other details I plan to discuss with them.

If you did decide to receive the whole amount and declare the Gift

Total Amount - Y1,100,000 = Taxable Amount

Gift Tax Rates From Lineal Relatives (Parents, Grand Parents, etc.)
Band Marginal Tax rate (％)
Under 1,999,000 10%
2,000,000 3,999,000 15%
4,000,000 5,999,000 20%
6,000,000 9,999,000 30%
10,000,000 14,999,000 40%
15,000,000 29,999,000 45%
30,000,000 44,999,000 50%
Over 45,000,000 55%

These are Tax Rates for Recipients over the age of 18, and differ slightly from the rates for non-related donors.


See
https://retirewiki.jp/wiki/Inheritance_tax

There is also a system called the "Early-Inheritance Tax System" or the "Unified Gift/Inheritance Tax System" - 相続時精算課税制度

which allows parents or grandparents to make a one-time gift tax-free up to 25 million yen to a child or grandchild, with the understanding that the value of the gift(s) at the time of gifting will be included in the value of the donor's estate at the time of death, and Inheritance Tax be calculated accordingly at that time.
From 2023, the usual annual Y1.1M tax-free gift allowance is also available in subsequent years.


Alternatively, there are Gift Tax Allowances and Deductions:
for a recipient under age 18,
for recipients over 18 for purchase of a Primary Residence for up to Y5M (significant caveats apply),
for recipients under 30 with annual income of less than Y10M for up to Y15M in Funds for Education (significant caveats apply),
for recipients between 18 and 50 for marriage and child care up to Y10M,
for a handicapped recipient up to Y60M or Y30M (significant caveats apply).

They will tell you all of this information at the National Tax Office.

There is a Look-Back Period where Gifts received in the last 3 years of the donor's life must be reassessed as Inheritance. This 3 year look-back period is being slowly increased from 2026, by 1 year per year to a maximum of 7 years in 2031

There is this guy in Nagoya who advertises a lot.

https://smartaxnagoya.wordpress.com/cat ... %e7%a8%8e/

but any Zeirishi should be able to consult on Gift Tax.

International Inheritance is a little more complicated.

This firm seems to be very well experienced in International Inheritances

https://chester-tax.com/plan/global-inheritance_en.html