Post JISA Investing

[CarlB]

If my understanding is correct, parents are entitled to use a 'General account" for their children for taxable investments. This account doesn't need to be reported to the tax authorities as long as annual gains are less than 200,000.

So a post-JISA a strategy could be to try to utilize this tax allowance on an annual basis (depending on market conditions) by 'churning' your investments. Let's say you invested in the e-Maxis All Country fund and made significant gains. You could sell that investment and buy the e-Maxis Advanced Country fund or the Nikko All Country fund with the proceeds. Of course, you would be out the market for a few days while the investments are processed (you may 'gain' or 'lose' depending on prevailing market conditions). To lessen any risk you could 'churn' your investments in batches.

The upshot is that you would avoid paying any capital gains tax if you need to sell a large amount of your investment in a particular tax year.

[Haystack]

1. I think gift tax rules might be a larger issue with this strategy. These rules, when it comes to investing in a child's account, with your own money are not clear.

However any profit from a sale in their accounts must be used "for them" I believe.

2. You still need to pay city tax on that 200,000 yen, and file your own tax return.

3. There's no wash trading rule Japan.

[CarlB]

However any profit from a sale in their accounts must be used "for them" I believe.

Thanks for your reply. Yes. I wasn't suggesting anything that might be construed as illegal.

You still need to pay city tax on that 200,000 yen, and file your own tax return.

I forgot about the city tax. I might just put it in a Specific account and pay the extra taxes rather than deal with extra paperwork...

[RetireJapan]

I forgot about the city tax. I might just put it in a Specific account and pay the extra taxes rather than deal with extra paperwork...

I'm planning to use the tokutei kouza in my grandkids' JNISA accounts from 2024. Just to accumulate though, hopefully I will brainwash them sufficiently by the time they are 18 that they will just leave the investments there until their retirement

[CarlB]

I forgot about the city tax. I might just put it in a Specific account and pay the extra taxes rather than deal with extra paperwork...

I'm planning to use the tokutei kouza in my grandkids' JNISA accounts from 2024. Just to accumulate though, hopefully I will brainwash them sufficiently by the time they are 18 that they will just leave the investments there until their retirement

Yeah. It seems the way to go all things considered.

[TBS]

If my understanding is correct, parents are entitled to use a 'General account" for their children for taxable investments. This account doesn't need to be reported to the tax authorities as long as annual gains are less than 200,000.
...

The 200,000 yen or less exemption from filing is only an option for salaried workers whose companies do a year-end adjustment and some pensioners, I believe. Children are unlikely to fall in either category, so I don't think your idea is workable here.

[CarlB]

TBS, thanks for the clarification.