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Re: Investing for my children
Posted: Mon Jun 27, 2022 12:32 pm
by RetireJapan
Deep Blue wrote: ↑Mon Jun 27, 2022 11:02 am
Thanks. It seems like that is an ok option if we choose to tie the money up in Japan. But won't CGT apply when they come to cash these investments in, 10, 20 or 30 years down the line? I would expect substantial capital growth by then (assuming 5% average annual investment returns) and then they'll be hit by 20% CGT?
Are accumulation investment vehicles a thing here? A class that automatically invests dividend income back into more units rather than paying out? And if they exist, do they avoid dividend tax?
Junior NISA is tax free until the child is 18. Subsequent capital gains/dividends are taxed normally.
Mutual funds in Japan often reinvest dividends internally. No dividends are paid and no tax is due. They are very tax-efficient. In a taxable account only 20% capital gains tax is due when selling, in NISA there is no tax due, and iDeCo is largely tax-free.
Re: Investing for my children
Posted: Mon Jun 27, 2022 1:08 pm
by Deep Blue
Thanks for the information. I’m just learning about the Tsumitate NISA and the extra layer of complexity that brings to the table. The 20 years free of CGT is very good, just a shame the contribution limits are low. But better than nothing!
Re: Investing for my children
Posted: Wed Jul 13, 2022 3:31 am
by Bubblegun
We can gift each child 1.1 million yen.
Does that have any tax benefits for the parents who give the Money?
Re: Investing for my children
Posted: Wed Jul 13, 2022 8:14 am
by beanhead
Bubblegun wrote: ↑Wed Jul 13, 2022 3:31 am
We can gift each child 1.1 million yen.
Does that have any tax benefits for the parents who give the Money?
Don't think so.
Donations which give a tax break are listed here:
https://www.nta.go.jp/english/taxes/ind ... 021/12.pdf
'Gifts to Kids' doesn't seem to be in there.
Of course if you invest it for them, it is technically their money, as well.
Re: Investing for my children
Posted: Wed Jul 13, 2022 3:19 pm
by Bubblegun
beanhead wrote: ↑Wed Jul 13, 2022 8:14 am
Bubblegun wrote: ↑Wed Jul 13, 2022 3:31 am
We can gift each child 1.1 million yen.
Does that have any tax benefits for the parents who give the Money?
Don't think so.
Donations which give a tax break are listed here:
https://www.nta.go.jp/english/taxes/ind ... 021/12.pdf
'Gifts to Kids' doesn't seem to be in there.
Of course if you invest it for them, it is technically their money, as well.
Thanks for that. I just wondered if there were any tax benefits for the parents.EG lowers the family income.
We do exactly that. We technically put all the money into the NISA/JNISA for them.