Sell the Legacy TNISA to fill up the New NISA?

[Oliver]

My university children have invested 100,000 yen into Tsumitate NISA . Now that the Legacy NISA is ending, and it is not automatically rolling over to the New NISA. What should we do?
Should we sell the Legacy NISA and move it over to the new NISA?
We will not go over the new NISA yearly allowance even if we took all of the money currently in NISA and added to it next year.
Maybe there is no benefit to moving the money.
Am I missing something?

[adamu]

There's little benefit to doing that.

Although the Tsumitate NISA is "ending" for new investments, existing investments keep their tax protection for the remaining term. Anything invested this year will stay tax free for 20 years.

You could sell it to try to convert the 20 year allowance to a lifetime allowance. But it's not risk free, and will also consume some of your new lifetime allowance. Personally I don't think it's worth it.

If there's any chance you might max out the New NISA before your old Tsumitate NISA tax free period expires (i.e. in the next 19 years if you invested this year), it's better not to sell the Tsumitate NISA investments.

[beanhead]

My university children have invested 100,000 yen into Tsumitate NISA . Now that the Legacy NISA is ending, and it is not automatically rolling over to the New NISA. What should we do?
Should we sell the Legacy NISA and move it over to the new NISA?

Why would you consider this?

I suggest you keep reading the info and opinions about the new NISA on here, and perhaps on JapanFinance on Reddit, to increase your understanding of how the NISA accounts work.
As Adamu says, there is no benefit to selling any tsumitate NISA unless you desperately need the funds.

[Oliver]

“I suggest you keep reading the info and opinions about the new NISA on here, and perhaps on JapanFinance on Reddit, to increase your understanding of how the NISA accounts works.”

Yes, I am in need of direction /information. Any links, post in this forum or YouTube anyone can recommend that I could share with my kids about the New NISA. English is better for me but kids are okay in Japanese.

[Tkydon]

“I suggest you keep reading the info and opinions about the new NISA on here, and perhaps on JapanFinance on Reddit, to increase your understanding of how the NISA accounts works.”

Yes, I am in need of direction /information. Any links, post in this forum or YouTube anyone can recommend that I could share with my kids about the New NISA. English is better for me but kids are okay in Japanese.

You can only get a certain amount into NISA in a given year.

Until now the limit was:

Junior NISA - Y800,000 per year
OR
Tsumitate NISA - Y400,000 per year
OR
Regular (Growth) NISA - Y1.2M per year

From next year, the limits for New NISA will be:

Junior NISA - Program abolished

Tsumitate NISA - Y1.2M per year
AND
Regular (Growth) NISA - Y2.4M per year


A recipient can receive gifts to a total of Y1.1M per year Tax Free, so contributions to a NISA would be a good way of making gifts.

If you already have money in a NISA, it can remain where it is for:

Junior NISA - 5 years from investment
OR
Tsumitate NISA - 20 years from investment
OR
Regular (Growth) NISA - 5 years from investment

before you have to decide what to do with it. This would allow you to get as much new money into the New NISA as possible.
If you cannot max the contributions in any one year, then you might consider moving money tax free from the older accounts to the New NISA to allow it to continue growing indefinitely in the future, bearing in mind that doing so will use up that amount from the annual limit and the Y18M Lifetime Limit for New NISA.

[Oliver]

If you take some money out of the New NISA after investing it will you be able to put it back into the 18 million contributions quota?
Or can you only put 18 million yen in and whether you take it out or not, you have already used up your investment quota?

It is a stupid question because I don’t think I will ever exceed my quota, but it is a question.

[beanhead]

If you take some money out of the New NISA after investing it will you be able to put it back into the 18 million contributions quota?
Or can you only put 18 million yen in and whether you take it out or not, you have already used up your investment quota?

It is a stupid question because I don’t think I will ever exceed my quota, but it is a question.

Not a stupid question. Actually a very good one.
Yes, you can sell from the NISA in the future and then buy replacement products but from Jan 1 of the following year. It looks like any quota resetting is done from the following calendar year. Discussed here somewhere.

Some useful links:

https://www.retirejapan.com/forum/viewtopic.php?t=2779

https://www.retirejapan.com/blog/the-new-eternal-nisa/

https://retirewiki.jp/wiki/NISA

[Tkydon]

If you take some money out of the New NISA after investing it will you be able to put it back into the 18 million contributions quota?
Or can you only put 18 million yen in and whether you take it out or not, you have already used up your investment quota?

It is a stupid question because I don’t think I will ever exceed my quota, but it is a question.

If you sell something, you will get the Lifetime Allowance back for the Purchase Price of what you sold, not the Selling Price.

If you sell some units or shares that you paid Y1M for, and you sold them for say Y1.5M, then you would get the Lifetime Allowance Credited back for the Y1M, and not the additional Y500k gain.

When you would be able to reinvest the funds would depend whether you have Annual and Lifetime Allowances available.

[Oliver]

Thank you for your speedy replies and helpful insights!
It has been a pleasure communicating on this forum!

[Oliver]

I remember that if I was pardoned from paying NENKIN I could only invest in Tsumitate NISA.
Is their a stipulation in the Eternal NISA for the people who are pardoned from paying NENKIN?