RetireJapan

https://japantoday.com/category/busines ... al-experts

Does anybody have more information about this? How likely is this type of proposed modification (or possible elimination) of inheritance taxes on the overseas assets of foreign, long-term residents?

Wow. That is big news. According to the following articles (in Japanese), it seems quite likely.

https://www.souzoku-hyogo.com/column/3575/
https://dejima-souzoku.com/2020/10/14/% ... %E8%A8%8E/

There is a catch, because the articles say : "exemption of the inheritance tax on foreign assets, if the taxpayer meets certain criteria.."
So it'll depend on what criteria will be set in the new scheme.
My understanding is that the government, through these fiscal measures, will target highly educated, high-income individuals working in the financial industry...

I'm pretty sure this won't apply to spouse visa or PR holders.

Imo such policies that separate between Japanese and foreigners, and maybe even between foreigners are highly problematic (and will not help attracting the financial industry anyway). It is first of all unfair to Japanese, but it also sets a standard for distinguishing between residents with Japanese nationality, and residents without a Japanese nationality.

mule96 wrote: ↑Thu Nov 26, 2020 5:20 am Imo such policies that separate between Japanese and foreigners, and maybe even between foreigners are highly problematic (and will not help attracting the financial industry anyway). It is first of all unfair to Japanese, but it also sets a standard for distinguishing between residents with Japanese nationality, and residents without a Japanese nationality.

That standard is already set. They can vote, we cannot.

I disagree with your assessment. I think this policy is designed to help attract and retain richer expats, who plan to stay here for a longer period of time but not permanently.

This goes hand in hand with the suggested policy changes for how bonuses for executives are taxed in Japan.

Japanese companies need some way of competing for foreign talent, as their low salaries and long hours are not so attractive to many.

Kanto wrote: ↑Thu Nov 26, 2020 7:46 am I disagree with your assessment. I think this policy is designed to help attract and retain richer expats, who plan to stay here for a longer period of time but not permanently.

That new policy is for people who stay longer than ten years. Imo that is a period where everybody should be treated the same.

To be clear, I believe this applies for when foreigners die in Japan, not when they receive inheritance proceeds from the estate of deceased parents or other relatives abroad. In the latter case, you are still required to report that and pay taxes on it if it meets a certain threshold, I believe. Note, too, that Japan has among the highest inheritance taxes in the world.

The ACCJ and others have pointed out that your family in your home country can get shafted in the event you die here. The J govt will want a big chunk of your overseas assets if you're rich, which these financial sector people usually are. The Kyodo article isn't clear on this distinction, but I believe this is what is referred to. Tell me if I'm wrong.

Discussion on reddit:

https://www.reddit.com/r/japanlife/comm ... ?context=3

As always, u/starkimpossibility is very knowledgeable.

Wow, some people on that reddit thread are basically suggesting that hiding their inheritance in the US might be a good idea. Someone needs to remind them that fraudulent reporting of oversea assets has some penalties here. Up to 1 year in prison I believe. Sleepless nights for decades over the fear to be "discovered" for a $1 million inheritance on which they refuse to pay, what, $200'000 in taxes...?

To be clear, I believe this applies for when foreigners die in Japan, not when they receive inheritance proceeds from the estate of deceased parents or other relatives abroad.

This is interesting.

"Don't die in Japan", is the phrase I saw reported on a Nikkei TV show this morning.

But to my mind it also should be "Tell your parents not to die while you are in Japan", or "Do not live in Japan when your parents die".

Notwithstanding the ability of the committees to make silly decisions, consider that if you are in line to receive a large inheritance from overseas, potentially being obliged to give up a large chunk of it to the Japanese government, which has indebted itself to astronomical levels, may indeed be a reason to stay or get out of Japan. So I think it should apply both ways.

Also, from the perspective of the foreign person overseas drawing up their will, do they want to give the money to their kid in Japan knowing that so much of it will be given up to the Japanese government? They could simply draw up their will to distribute the money in ways to minimize or eliminate tax due to the Japanese government.

My view is inheritance tax should be abolished completely for all, but I would welcome it if they do at least excuse it for some foreigners. Because it's a start.

Edit: that image on the dejima-souzoku page showing that foreign assets would be exempt versus domestic assets being taxed to 55%, makes me wonder what sane wealthy person would invest in Japan under those conditions. It also makes me think I'd better get my kids a foreign passport, in case it might benefit them to be a "foreigner" when they themselves grow up.