Education Trust

[Herbert]

Have any foreigners had success setting up an education trust for a child in Japan with the donor Grandparent and the funds coming from abroad? So far the trust banks I have contacted have refused us because of the foreign donor/foreign money aspect. It feels wrong that long-term resident foreigners are liable for inheritance tax in a similar way to Japanese, yet are discriminated against when the banks refuse to allow you to use the government-provided tax exemptions. This education trust is only available until the end of March 2019 so am feeling the time pressure...

[RetireJapan]

I haven't come across education trusts yet -what are they called in Japanese?

A Junior NISA might provide similar advantages, have you looked into that? The annual limit is 800,000 yen, so less than the gift tax exemption.

[Herbert]

Thanks for your reply.
In Japanese it is called 教育資金贈与信託.

Here is a link about it in Japanese from the Japanese Association of Trust Companies website:

https://www.shintaku-kyokai.or.jp/speci ... ation.html


Here is the link with a simple English explanation from the same website:
https://www.shintaku-kyokai.or.jp/en/tr ... 14_03.html

It was set up in 2013 by the government for 5 years, finishing this March 2019.

This video explains is quite well:

https://www.youtube.com/watch?v=kJIo3_pLK1A

[RetireJapan]

Very interesting. There seems to be a lot of paperwork, and I'm guessing the accounts just pay a nominal amount of interest?

Before using this I would be inclined to just give the child (and the parents?) the full 1.1m yen a year (tax exempt gift), and possibly invest some of it in a Junior NISA.

Anyone else?

[Herbert]

Thanks for your reply.

In Japanese it's called 教育資金贈与信託.

It was initiated by the government in 2013 and its application deadline is March 2019. Some websites seem to say it is being extended by two years but my local tax office told me its not.

I am going to be looking into the Junior Nisa options too, though the above trust allows for up to 1,500 man tax free.

English brief explanation:
https://www.shintaku-kyokai.or.jp/en/tr ... 14_03.html
Japanese more detailed explanation:
https://www.shintaku-kyokai.or.jp/speci ... ation.html