Hello. New member here and the absolute definition of a ‘Dummy’ in most financial matters so please forgive any obvious oversights on my part regarding seeking advice. I do intend to explore the forum in greater depth but would benefit from some basic pointers to get started.
My situation:
UK citizen but long term resident in Japan, on a spouse visa.
I’m very soon to receive some inheritance money from the sale of my late mother’s house in the UK. The exact amount’s uncertain but likely to be around 30 million yen - possibly a bit more. It’s not something I’d ever expected so find myself unprepared.
The money will be held in the Executor's account, which my UK siblings are managing, until I can determine how to get it transferred to Japan and once here, what to do with it. My very broad plan is to keep roughly half as readily accessible funds (2 kids in college) and the other half for investments/savings. I have about 10 years to go until retirement and envisage this half easing things a little in the future.
I’ll likely need structured, tailored advice to move forward and have noted Retire Japan offers online coaching. At this stage at least, I’m looking to get a general sense of what I need to be researching and becoming more aware of.
Perhaps it’s too simplistic to ask “What would you do in my situation?” but the following points hopefully indicate where I’m at on the learning curve so any pointers are much appreciated, i.e. what to consider, where to research further, things I’ve missed, etc.
1. Inheritance Tax: I believe there are thresholds and my residence status makes me ‘eligible’ to pay should the amount exceed these. Furthermore, how does one go about declaring this?
2. Transferring funds: Is it better to have the whole amount transferred to my Japanese bank account first or better to set up specific savings accounts/investment plans first?
3. Investing/saving for the future – OK I guess that’s too broad right now. I’m aware of NISA and iDeCo and currently reading up about these.
It's all quite sudden so apologies for not asking more specific questions. Thank you in advance for any advice or suggestions.
Cheers!
Transferring UK Inheritance to Japan - I'm clueless!
Re: Transferring UK Inheritance to Japan - I'm clueless!
:
:
This Guide to Japanese Taxes, English and Japanese Tai-Yaku 対訳, is now a little dated:
https://zaik.jp/books/472-4
The Publisher is not planning to publish an update for '23 Tax Season.
:
This Guide to Japanese Taxes, English and Japanese Tai-Yaku 対訳, is now a little dated:
https://zaik.jp/books/472-4
The Publisher is not planning to publish an update for '23 Tax Season.
-
captainspoke
- Sage
- Posts: 1413
- Joined: Tue Aug 15, 2017 9:44 am
Re: Transferring UK Inheritance to Japan - I'm clueless!
First the wiki here has a section on inheritance: https://retirewiki.jp/wiki/Inheritance_tax, and there's also a wiki at the JapanFinance sub: https://www.reddit.com/r/JapanFinance/w ... nheritance, so read thru those.
Next, you mention siblings, which could figure into an inheritance tax calculation (more of it is exempted), and if none of those people are here in japan, I think you get to claim a larger portion inheritance tax free (the full ¥30M, plus 6M for you, and I'm not sure, but maybe more).
Also, from what I've read, inheritors in japan are supposed to pay any taxes within 10 months of the death concerned.
*
Once the funds are legal--you've declared the inheritance and paid taxes due, if any, I think you should be able to move the entire amount here in one go, tho that is just an option--you could do it in 2-4 transfers if that was more comfortable (maybe one smaller transfer initially to insure all the transfer details are correct, then the rest). This would be done via a wire transfer. (And for that amount, the service called Wise would be quite a bit more expensive.) I would probably use one of the larger, national banks, such as shinsei, sony, MUFJ, perhaps SMBC Prestia. I would go to one main account first, and then use domestic transfers for anything else I decided on.
Good luck!
Next, you mention siblings, which could figure into an inheritance tax calculation (more of it is exempted), and if none of those people are here in japan, I think you get to claim a larger portion inheritance tax free (the full ¥30M, plus 6M for you, and I'm not sure, but maybe more).
Also, from what I've read, inheritors in japan are supposed to pay any taxes within 10 months of the death concerned.
*
Once the funds are legal--you've declared the inheritance and paid taxes due, if any, I think you should be able to move the entire amount here in one go, tho that is just an option--you could do it in 2-4 transfers if that was more comfortable (maybe one smaller transfer initially to insure all the transfer details are correct, then the rest). This would be done via a wire transfer. (And for that amount, the service called Wise would be quite a bit more expensive.) I would probably use one of the larger, national banks, such as shinsei, sony, MUFJ, perhaps SMBC Prestia. I would go to one main account first, and then use domestic transfers for anything else I decided on.
Good luck!
Re: Transferring UK Inheritance to Japan - I'm clueless!
Many thanks to Tkydon and captainspoke!
The wiki here is very helpful, as is the one on reddit. I'd come across some of the details in other sources but these are more focused - much appreciated.
@Tkydon, your second link took me to a 404 but no worries. I've gleaned enough to realise this is something I can't handle myself with my 'skill set' and will be seeking professional support.
One detail that concerns me is this:
"People who owe inheritance tax must file an inheritance tax return within 10 months of the relevant death."
In another sources I read it was "within 10 months of acquisition" (https://www.nichizeiren.or.jp/eng/pdf/G ... es2018.pdf)
It is actually 3 years since my mother passed away. A number of issues and complications ensued, delaying the house being put on the market but things have suddenly moved quickly and the sale is now imminent. Perhaps the word 'acquisition' has a specific meaning here, or is perhaps a translation issue? I'd assumed (erroneously, no doubt) that the size of the 'acquisition'/tax calculation could only be determined once the house was sold and divided up between the heirs. Am I wrong?
@captainspoke, if I'm right here, the suggestion is to sort out the tax side before transferring to Japan. Seems logical as in my mind there will be a need to show where the money's coming from and all is above board, i.e. there's no money laundering or such like going on. Therefore, having documentation to show it's inheritance on which tax liabilities have already been settled would be helpful here, right? What if there is no tax to pay? Seems improbable but that question now arises. Would the fact that the payment is issued from the Executor's account address such concerns?
Anyway, my gratitude once again. I've got a lot to get on with.
Cheers!
The wiki here is very helpful, as is the one on reddit. I'd come across some of the details in other sources but these are more focused - much appreciated.
@Tkydon, your second link took me to a 404 but no worries. I've gleaned enough to realise this is something I can't handle myself with my 'skill set' and will be seeking professional support.
One detail that concerns me is this:
"People who owe inheritance tax must file an inheritance tax return within 10 months of the relevant death."
In another sources I read it was "within 10 months of acquisition" (https://www.nichizeiren.or.jp/eng/pdf/G ... es2018.pdf)
It is actually 3 years since my mother passed away. A number of issues and complications ensued, delaying the house being put on the market but things have suddenly moved quickly and the sale is now imminent. Perhaps the word 'acquisition' has a specific meaning here, or is perhaps a translation issue? I'd assumed (erroneously, no doubt) that the size of the 'acquisition'/tax calculation could only be determined once the house was sold and divided up between the heirs. Am I wrong?
@captainspoke, if I'm right here, the suggestion is to sort out the tax side before transferring to Japan. Seems logical as in my mind there will be a need to show where the money's coming from and all is above board, i.e. there's no money laundering or such like going on. Therefore, having documentation to show it's inheritance on which tax liabilities have already been settled would be helpful here, right? What if there is no tax to pay? Seems improbable but that question now arises. Would the fact that the payment is issued from the Executor's account address such concerns?
Anyway, my gratitude once again. I've got a lot to get on with.
Cheers!
-
Beaglehound
- Veteran
- Posts: 677
- Joined: Wed Apr 10, 2019 12:21 pm
Re: Transferring UK Inheritance to Japan - I'm clueless!
There should not be any inheritance tax due here, you have a 30m basic exemption plus 6m for each statutory heir (of which there seem to be at least three since you mention siblings plural). That would be 48m for the estate but assuming you are the only heir tax resident in Japan you get the whole amount as a deduction, which is a result. As far as I am aware you only have to declare to the tax folk if there will actually be tax to pay on the inheritance. (I imagine there will be tax to pay in the UK but that's a different story).
Where you may be less in the clear is that you appear to have inherited a share of a house. I believe that may put you on the hook for capital gains tax on the difference between what your mother paid for the house and what it sells for, minus any relevant deductions (renovations or selling costs). In your shoes I would run it past a tax professional here.
As regards sending the cash, I echo the advice of the Captain above. If you have a UK savings account that pays decent interest it may be worth keeping some there for a while. You are on the right track thinking about NISA and IDECO. Maximise these would be my plan, set one of them up for your wife too (though bear in mind you won't be able to 'gift' her over 1.1million a year to invest).
For the half you have earmarked as readily accessible funds, that's a lot to have sitting in a bank earning a pittance in interest. You may want to consider investing some of that too. Some banks here also offer term deposits, e.g. SBI had a year at 0.3% a while back, maybe still does. These rates are of course still rubbish but better than nothing. With whispers of changes in interest rates here, we may even see the rates available creep up.
Where you may be less in the clear is that you appear to have inherited a share of a house. I believe that may put you on the hook for capital gains tax on the difference between what your mother paid for the house and what it sells for, minus any relevant deductions (renovations or selling costs). In your shoes I would run it past a tax professional here.
As regards sending the cash, I echo the advice of the Captain above. If you have a UK savings account that pays decent interest it may be worth keeping some there for a while. You are on the right track thinking about NISA and IDECO. Maximise these would be my plan, set one of them up for your wife too (though bear in mind you won't be able to 'gift' her over 1.1million a year to invest).
For the half you have earmarked as readily accessible funds, that's a lot to have sitting in a bank earning a pittance in interest. You may want to consider investing some of that too. Some banks here also offer term deposits, e.g. SBI had a year at 0.3% a while back, maybe still does. These rates are of course still rubbish but better than nothing. With whispers of changes in interest rates here, we may even see the rates available creep up.
Re: Transferring UK Inheritance to Japan - I'm clueless!
@Beaglehound, many thanks for your kind input. There are in fact 4 siblings, including myself. I'm the only one resident in Japan so that would appear to put me in the clear based on a rough tallying up of figures. Although the question I now have is whether I would need to declare it regardless of it not being liable for tax? Perhaps in my tax filing in the new year?
Thank you for the second point regarding capital gains tax. That's something I hadn't considered. The house was purchased in 1973 if I recall - I was around 6 or 7 years old when we moved there. What my parents paid for it, I have no idea but being in the south east of the UK, the price would be a fraction of current market value given the sharp rise in property values. Anyway, I'm off to read up further on this area.
Regarding the separation of funds into accessible money and future savings, my half and half point wasn't strictly meant to imply an equal division, merely that I've been thinking of using the whole amount in these two ways, but point taken, thanks. My priority is clarifying the tax and money transfer situation, and then making a more careful assessment of how to allocate funds.
I've thought about leaving some in the UK but only have a current account there right now. With the sale of my mother's house, I no longer have a 'stable' UK address and have temporarily registered my UK current account at my sister's address for the time being. For simplicity alone, I'd find it easier to manage things with all the money here, with a decent proportion put into things like NISA, iDeCo, term deposits, so I appreciate the pointers you gave and am open to all suggestions - there's a whole world here that I've been unaware of so just hearing these ideas is giving me something to follow up. Thanks.
Next step I believe is to consult a tax professional. If anyone can recommend a service, I'm based in Tokyo.
Cheers!
Thank you for the second point regarding capital gains tax. That's something I hadn't considered. The house was purchased in 1973 if I recall - I was around 6 or 7 years old when we moved there. What my parents paid for it, I have no idea but being in the south east of the UK, the price would be a fraction of current market value given the sharp rise in property values. Anyway, I'm off to read up further on this area.
Regarding the separation of funds into accessible money and future savings, my half and half point wasn't strictly meant to imply an equal division, merely that I've been thinking of using the whole amount in these two ways, but point taken, thanks. My priority is clarifying the tax and money transfer situation, and then making a more careful assessment of how to allocate funds.
I've thought about leaving some in the UK but only have a current account there right now. With the sale of my mother's house, I no longer have a 'stable' UK address and have temporarily registered my UK current account at my sister's address for the time being. For simplicity alone, I'd find it easier to manage things with all the money here, with a decent proportion put into things like NISA, iDeCo, term deposits, so I appreciate the pointers you gave and am open to all suggestions - there's a whole world here that I've been unaware of so just hearing these ideas is giving me something to follow up. Thanks.
Next step I believe is to consult a tax professional. If anyone can recommend a service, I'm based in Tokyo.
Cheers!
Re: Transferring UK Inheritance to Japan - I'm clueless!
That's just my Signature, as I figure that book will be useful for the people asking tax questions
It seems they have changed their website. It is now here:
https://zaik.jp/books/472-4
You might find one at Book-Off Online, but they are out of stock at the moment...
https://shopping.bookoff.co.jp/used/0019533464
Last edited by Tkydon on Thu May 02, 2024 2:17 pm, edited 1 time in total.
:
:
This Guide to Japanese Taxes, English and Japanese Tai-Yaku 対訳, is now a little dated:
https://zaik.jp/books/472-4
The Publisher is not planning to publish an update for '23 Tax Season.
:
This Guide to Japanese Taxes, English and Japanese Tai-Yaku 対訳, is now a little dated:
https://zaik.jp/books/472-4
The Publisher is not planning to publish an update for '23 Tax Season.
Re: Transferring UK Inheritance to Japan - I'm clueless!
If your share of the inheritance is within the exemption limit (sounds like it is) then there is no need to declare it as far as the Japan tax agency are concerned. This I was told over the phone from the tax office very recently. When you transfer the funds, the receiving bank will ask for some details about the source of the funds and at that point you may be required to submit a statement or summary from the executors.Loth wrote: ↑Sat Dec 16, 2023 9:12 am @Beaglehound, many thanks for your kind input. There are in fact 4 siblings, including myself. I'm the only one resident in Japan so that would appear to put me in the clear based on a rough tallying up of figures. Although the question I now have is whether I would need to declare it regardless of it not being liable for tax? Perhaps in my tax filing in the new year?
Thank you for the second point regarding capital gains tax. That's something I hadn't considered. The house was purchased in 1973 if I recall - I was around 6 or 7 years old when we moved there. What my parents paid for it, I have no idea but being in the south east of the UK, the price would be a fraction of current market value given the sharp rise in property values. Anyway, I'm off to read up further on this area.
Regarding the separation of funds into accessible money and future savings, my half and half point wasn't strictly meant to imply an equal division, merely that I've been thinking of using the whole amount in these two ways, but point taken, thanks. My priority is clarifying the tax and money transfer situation, and then making a more careful assessment of how to allocate funds.
I've thought about leaving some in the UK but only have a current account there right now. With the sale of my mother's house, I no longer have a 'stable' UK address and have temporarily registered my UK current account at my sister's address for the time being. For simplicity alone, I'd find it easier to manage things with all the money here, with a decent proportion put into things like NISA, iDeCo, term deposits, so I appreciate the pointers you gave and am open to all suggestions - there's a whole world here that I've been unaware of so just hearing these ideas is giving me something to follow up. Thanks.
Next step I believe is to consult a tax professional. If anyone can recommend a service, I'm based in Tokyo.
Cheers!
Re: Transferring UK Inheritance to Japan - I'm clueless!
Thanks again, Tkydon. I'll add 税法 to my itinerary when visiting Book-Off stores.Tkydon wrote: ↑Sat Dec 16, 2023 4:47 pm It seems they have changed their website. It is now here:
https://zaik.jp/books/472-4
You might find one at Book-Off Online, but they are out of stock at the moment...
https://shopping.bookoff.co.jp/used/0019533464
Thanks robster. That's good to hear. I'll ask my siblings if they can assist with such when it comes to the funds arriving in the executor's account. May I ask whether you have already done this yourself? You mention getting this information recently.robster wrote: ↑Sun Dec 17, 2023 5:16 am If your share of the inheritance is within the exemption limit (sounds like it is) then there is no need to declare it as far as the Japan tax agency are concerned. This I was told over the phone from the tax office very recently. When you transfer the funds, the receiving bank will ask for some details about the source of the funds and at that point you may be required to submit a statement or summary from the executors.
A big thank you to everyone here, taking your time to comment and advise. Hopefully, I'll be in a position to do likewise for others when things have been resolved.
Cheers!
Re: Transferring UK Inheritance to Japan - I'm clueless!
I'm actually in mid-process. Funds have arrived at my bank (Sony Bank - an account which I opened for the purpose of receiving the funds in the original currency rather than let the banks exchange at an unfavourable rate), I today stated the source as "inheritance", and now waiting to see if they ask for any supporting documentation.