NISA after 5 years

[Kiyora999]

Hi everyone!

I was looking at some informations about NISA and I have a question.
It seems like there's 3 periods to open a NISA, the current one ending at the end of December 2017 and the next one beginning in January 2018.

After that, what happen to the NISA? Do we have to sell everything before opening a new one to have free-tax again? Or will everything be transferred on a new NISA automatically if we do some kind of request?

I actually don't have a NISA yet, and was planning to open it in October 2017 and put approx 100 000 yens/month on it from then. But if I have to sell everything in December 2017, I'm not sure it's worth opening it yet...

Thank you very much for your help!

[RetireJapan]

Hi Kiyora

Each year of a NISA account is treated separately.

You get a 1.2 million allowance for the following 5 years. So in January 2018 if you have a NISA account you can use your 2018 allowance of 1.2 million. On December 31st 2022 the account will end. At that point you can roll over up to 1.2 million yen's worth of assets into your 2023 allowance, or just leave them at which point they will be moved to your taxable account.

You can see my current NISA status here:

https://ibb.co/eerJuv

You can see that I have managed to spend almost the full allowance each year (the limit was 1 million for the first two years).

One thing to watch out for with your plan: if your purchase costs are high it might be better to wait and buy things every three months, for example. I tend to spend half my allowance twice a year for that reason.

I'm planning to buy new assets each year and let the old ones be moved into my taxable account.

[Kiyora999]

Thank you very much for your fast reply!

Oh OK I see, so basically each year investment are tax free for the next 5 years. So it doesn't stop at one time, the money invested in 2017 is tax free until 2021 and the money in 2018 until 2022 like on the schema on the link below?
https://www.sbisec.co.jp/ETGate/?OutSid ... &getFlg=on
Then, at the end of each 5 year period, we can move what we invested in, in a taxable account that's right?
When I look at the schema I don't feel like the investments are added to the one's bought the previous year.

One thing to watch out for with your plan: if your purchase costs are high it might be better to wait and buy things every three months, for example. I tend to spend half my allowance twice a year for that reason.

OK I see ! I should maybe open the account in November for safety then and invest a one-time amount in the beginning of December to not pay too much fees?

When the 5 years end, can we move the assets to another broker like Interactive Brokers? I plan to open one account there when I'll be more familiar with stocks in 2018 to buy european stocks and diversify my portfolio.


Edit : I feel like I can't open a NISA account because I started living in Japan in October 2014...　I have to wait until January 2018 that the 2nd period begins.
NISA口座（少額投資非課税口座）開設には、「住民票の写し」等、2013年1月1日時点の住所が確認できる書類の提出が義務付けられています。
2013年1月1日以降の転居の有無によって、提出する書類が異なります。必ず以下をご確認のうえ、所定の書類をご用意ください。

勘定設定期間とは？

NISAは無期限の制度ではなく、非課税の恩恵が得られる期限が決められています。現状では、NISAは10年間限定の制度となっています。「勘定設定期間」とは、NISAが適用できる期間を指しており、10年間は以下の３期間に分かれています。
・第１期間：2014年1月1日～2017年12月31日の4年間
・第２期間：2018年1月1日～2021年12月31日の4年間
・第３期間：2022年1月1日～2023年12月31日の2年間

NISA口座を開設または維持するためには、この勘定設定期間ごとに、税務署が交付する「非課税適用確認書（確認書）」が必要となります。この確認書を申請する手続きは、口座を開設したい金融機関（証券会社など）で行います。

[Steve]

I have an idiot's question to ask, vaguely connected to this thread.

Do I need to re-apply for or somehow trigger each year's NISA account or does it start automatically? I've been assuming the latter, but everybody knows what's assumptions lead to, especially in Japan!

[RetireJapan]

I have an idiot's question to ask, vaguely connected to this thread.

Do I need to re-apply for or somehow trigger each year's NISA account or does it start automatically? I've been assuming the latter, but everybody knows what's assumptions lead to, especially in Japan!

I just got my next year's allocation at the beginning of the year each time. I suspect it might be different from the second 5-year period (from 2018), but we'll have to wait and see until January.

[RetireJapan]

Edit : I feel like I can't open a NISA account because I started living in Japan in October 2014...　I have to wait until January 2018 that the 2nd period begins.

Wow, I hadn't noticed that! Interesting. At least you don't have to wait too long, eh?

[Akatani]

Kiyora, I think having to wait til 2018 could be a good thing for you. If you invested in nov of 2017, you'd be burning a full year of tax free gains & dividends. On the other hand, they say investing early is good too. Luckily you don't have to make the choice!

[Nishiki2013]

I think this is related to the original post so I'll post it here.

I've just sent off the paperwork to Mastui Shoken to open a NISA account. I didn't realize that they started on the 1st January. Does it mean I'll lose a 8/9 months of my 5-year allocation or would it be best to wait until Jan 1st 2018 to buy stock? Are accounts usually activated once funds are received.

I'm still a bit vague on the details regarding NISA so apologies if these are silly questions. I've maxed out my iDeco J401k so I'm not even sure how much I need to use NISA anyway...

Sean.

[RetireJapan]

Hi Sean

NISA is quite relaxed. It works off a yearly allowance of 1.2m from Jan 1 to Dec 31 (but be careful cutting it too fine at the end of the year!).

You can buy things at any time within that calendar year using that year's allowance.

You can sell at any time but then the investments come out of the NISA and you don't get your allowance back.

I would guess that you'll be able to use your *2017* allowance if you open the account now. It's much quicker to open than iDeCo

[Kiyora999]

Kiyora, I think having to wait til 2018 could be a good thing for you. If you invested in nov of 2017, you'd be burning a full year of tax free gains & dividends. On the other hand, they say investing early is good too. Luckily you don't have to make the choice!

Yes, I have more time to learn this way... It looks like registrations for the 2nd period will begin before January 1st and we'll be able to invest from January 1st, so I'll check SBI website again later and have everything ready for 2018!