Death & Taxes

[wagyl]

But doesn't this new law in Japan imply that Japan taxes at the source as well?

Liability in Japan is with the beneficiaries. It is not with the estate, so it is not at source as such. That has not changed.

As SJ pointed out, I think it is unlikely that Japan is actually going to be chasing down people in other countries with a tax liability, any more than any other country actively pursues tax liability of people outside the country. The fact that the US has just started doing this has been very noteworthy. However, if that non-citizen non-resident chooses to come to Japan, there might be issues.

[Wage Slave]

But doesn't this new law in Japan imply that Japan taxes at the source as well?

Liability in Japan is with the beneficiaries. It is not with the estate, so it is not at source as such. That has not changed.

Ta. Can't think what I was thinking there for a minute. Mind is more on cunning plans to reap a bit of profit from the current little imbroglio in China.

[Salty]

But doesn't this new law in Japan imply that Japan taxes at the source as well?

Liability in Japan is with the beneficiaries. It is not with the estate, so it is not at source as such. That has not changed.

As SJ pointed out, I think it is unlikely that Japan is actually going to be chasing down people in other countries with a tax liability, any more than any other country actively pursues tax liability of people outside the country. The fact that the US has just started doing this has been very noteworthy. However, if that non-citizen non-resident chooses to come to Japan, there might be issues.

If they don`t do this already, my guess is that eventually the NTA will start to `withold` taxes at source before allowing remittance of estate proceeds from Japan to an overseas heir.

[kurogane]

But doesn't this new law in Japan imply that Japan taxes at the source as well?

Liability in Japan is with the beneficiaries. It is not with the estate, so it is not at source as such. That has not changed.

As SJ pointed out, I think it is unlikely that Japan is actually going to be chasing down people in other countries with a tax liability, any more than any other country actively pursues tax liability of people outside the country.

Yes. So much for the nefarious tax policies specifically designed to punish those cashbag foreigners and discourage them from moving to Japan for work. Now, where I can see a problem is residents of Japan coming into Western level real estate inheritances, as you mentioned. The magic 6 level is no longer as uncommon as it used to be. So, Charisma Jones' is an only child that has been toiling in the ECC salt mines for some years now, and parents leave him their 8 million CAD/USD/GBP/AUSD estate. The question is, how does the JRA know that, assuming he's not a complete idiot and either reports it or imports it wholesale?

To my apologist mind this policy, as with most Jpn gov't policies, is aimed at Japanese people, discriminatory as that might sound to some: what they seem to want to ensure is that they get their share of baby boomers' chunk of Bubble change, and also by focussing on the recipients, to claw back some of the Yen that was transferred to Other Climes and has been sitting offshore since. Does that make sense?

PS nice point about my nickels and dimes being your toonies and loonies. Good comment, eh! Maple Bacon Doughnuts fer you.

[wagyl]

But doesn't this new law in Japan imply that Japan taxes at the source as well?

Liability in Japan is with the beneficiaries. It is not with the estate, so it is not at source as such. That has not changed.

As SJ pointed out, I think it is unlikely that Japan is actually going to be chasing down people in other countries with a tax liability, any more than any other country actively pursues tax liability of people outside the country. The fact that the US has just started doing this has been very noteworthy. However, if that non-citizen non-resident chooses to come to Japan, there might be issues.

If they don`t do this already, my guess is that eventually the NTA will start to `withold` taxes at source before allowing remittance of estate proceeds from Japan to an overseas heir.

But what we are all talking about here is George, with substantial assets in Massachusetts, living it up in the C suite in Marunouchi and residing at Heimat Azabu Juban, dying while Japan resident and George Junior in Boston getting the lot. There is nothing being remitted from Japan, except for an extensive collection of kitsch sensu.

[wagyl]

But doesn't this new law in Japan imply that Japan taxes at the source as well?

Liability in Japan is with the beneficiaries. It is not with the estate, so it is not at source as such. That has not changed.

As SJ pointed out, I think it is unlikely that Japan is actually going to be chasing down people in other countries with a tax liability, any more than any other country actively pursues tax liability of people outside the country.

Yes. So much for the nefarious tax policies specifically designed to punish those cashbag foreigners and discourage them from moving to Japan for work. Now, where I can see a problem is residents of Japan coming into Western level real estate inheritances, as you mentioned. The magic 6 level is no longer as uncommon as it used to be. So, Charisma Jones' is an only child that has been toiling in the ECC salt mines for some years now, and parents leave him their 8 million CAD/USD/GBP/AUSD estate. The question is, how does the JRA know that, assuming he's not a complete idiot and either reports it or imports it wholesale?

To my apologist mind this policy, as with most Jpn gov't policies, is aimed at Japanese people, discriminatory as that might sound to some: what they seem to want to ensure is that they get their share of baby boomers' chunk of Bubble change, and also by focussing on the recipients, to claw back some of the Yen that was transferred to Other Climes and has been sitting offshore since. Does that make sense?

PS nice point about my nickels and dimes being your toonies and loonies. Good comment, eh! Maple Bacon Doughnuts fer you.

I agree with your post in its entirety, except I would like to point out that you have to choose between being a complete idiot and reporting overseas assets to the National Tax Authority, and being a complete idiot and ignoring your legal obligation to report to the National Tax Authority. Whatever you do, you are an idiot (merely for getting a mention in a will), just which kind of idiot do you want to be?

[Salty]

But doesn't this new law in Japan imply that Japan taxes at the source as well?

Liability in Japan is with the beneficiaries. It is not with the estate, so it is not at source as such. That has not changed.

As SJ pointed out, I think it is unlikely that Japan is actually going to be chasing down people in other countries with a tax liability, any more than any other country actively pursues tax liability of people outside the country. The fact that the US has just started doing this has been very noteworthy. However, if that non-citizen non-resident chooses to come to Japan, there might be issues.

If they don`t do this already, my guess is that eventually the NTA will start to `withold` taxes at source before allowing remittance of estate proceeds from Japan to an overseas heir.

But what we are all talking about here is George, with substantial assets in Massachusetts, living it up in the C suite in Marunouchi and residing at Heimat Azabu Juban, dying while Japan resident and George Junior in Boston getting the lot. There is nothing being remitted from Japan, except for an extensive collection of kitsch sensu.

Sure, I get that example.

But I`d also hazard to guess that the JTA and the IRS are joined at the hip - maybe not quite for inheritance tax collections at this point, but at least as far as reporting goes. The IRS goes after the full world-wide estate of a deceased American and to be able to do that needs the JTA to report on Japan held assets, so tit for tat, would be my guess.

[Samurai_Jerk]

But doesn't this new law in Japan imply that Japan taxes at the source as well?

Liability in Japan is with the beneficiaries. It is not with the estate, so it is not at source as such. That has not changed.

As SJ pointed out, I think it is unlikely that Japan is actually going to be chasing down people in other countries with a tax liability, any more than any other country actively pursues tax liability of people outside the country. The fact that the US has just started doing this has been very noteworthy. However, if that non-citizen non-resident chooses to come to Japan, there might be issues.

If they don`t do this already, my guess is that eventually the NTA will start to `withold` taxes at source before allowing remittance of estate proceeds from Japan to an overseas heir.

But what we are all talking about here is George, with substantial assets in Massachusetts, living it up in the C suite in Marunouchi and residing at Heimat Azabu Juban, dying while Japan resident and George Junior in Boston getting the lot. There is nothing being remitted from Japan, except for an extensive collection of kitsch sensu.

Sure, I get that example.

But I`d also hazard to guess that the JTA and the IRS are joined at the hip - maybe not quite for inheritance tax collections at this point, but at least as far as reporting goes. The IRS goes after the full world-wide estate of a deceased American and to be able to do that needs the JTA to report on Japan held assets, so tit for tat, would be my guess.

Right but if you live in Japan and get an inheritance it makes sense that you pay Japanese taxes. If aren't a resident of Japan and not a Japanese national but your inheritance originates in Japan it also makes sense that you pay Japanese taxes. However, if you aren't a resident/Japanese national and your inheritance originates outside of Japan, there's not much the Japan tax agency can do about it and in such cases all the local authority would care about is what you owe them. Until we start getting reciprocal enforcement agreements that's not going to change.

[matsuki]

Keiba is more fun: there are animals there!

Don't get me started...the ex's pops "invested" more dead people's money in that than all of us combined.

Well at least no one will ever have to pay the taxman inheritance taxes on that lost money.

Honestly, your "blow it all at Vegas" plan is basically saying "my kids aren't going to see any of this money, but God dammit, neither is the tax office!"
It is a cool way to say "my children are losers," otherwise known as cutting off your nose to spite your face.

You're assuming that the soon to be deceased actually blows it all in Vegas....instead of enjoying some shows there and just handing over cash to their kids.

But I`d also hazard to guess that the JTA and the IRS are joined at the hip - maybe not quite for inheritance tax collections at this point, but at least as far as reporting goes. The IRS goes after the full world-wide estate of a deceased American and to be able to do that needs the JTA to report on Japan held assets, so tit for tat, would be my guess.

Definitely working together but keep in mind the US exemptions mean the flow on this particular tax would a one way tap.

On topic:

fifteen of the thirty-four countries in the OECD have no taxes on property passed to lineal heirs. The average estate tax rate across the OECD is 15 percent with a median tax rate of 7 percent.

The estate tax is losing ground around the world, not because moral conundrums have been resolved, but rather because it fails at the basic characteristics of being a tax. Its rate is high, causing a substantial drag on growth. Its base is narrow, making it a poor revenue raiser. And lastly, its base is poorly-defined, creating additional economic losses from tax planning.
The ultimate purpose of tax collection is revenue generation. Due to the properties described above, the estate tax fails at effectively achieving that end. Eliminating it is the most serious option for reform.

[wagyl]

Keiba is more fun: there are animals there!

Don't get me started...the ex's pops "invested" more dead people's money in that than all of us combined.

Well at least no one will ever have to pay the taxman inheritance taxes on that lost money.

Honestly, your "blow it all at Vegas" plan is basically saying "my kids aren't going to see any of this money, but God dammit, neither is the tax office!"
It is a cool way to say "my children are losers," otherwise known as cutting off your nose to spite your face.

You're assuming that the soon to be deceased actually blows it all in Vegas....instead of enjoying some shows there and just handing over cash to their kids.

Yes well I also assumed that nobody committed arson and then defrauded their insurance. Silly me with my assumptions. Any other tax evasion advice? Avoidance just isn't enough for me any more.

I know of one country which has recently had an amnesty on declaring Swiss bank accounts. Almost all of them were opened by refugees fleeing postwar Europe on their way through, those account owners have died, and their children were left with the guilt. Having a house-value wad of cash that you have to keep in the safe and trickle spend over the rest of your life sounds like a similar burden.

[matsuki]

Having a house-value wad of cash that you have to keep in the safe and trickle spend over the rest of your life sounds like a similar burden.

That's one "burden" I wouldn't mind having

[Mike Oxlong]

Having a house-value wad of cash that you have to keep in the safe and trickle spend over the rest of your life sounds like a similar burden.

That's one "burden" I wouldn't mind having

Is that so, Mr. Pinkman?

[matsuki]

That's right Beeeeyach! (though I'm more likely to call Saul than try to pull that off)

[wagyl]

Asahi Newspaper (Japanese) explains how you can transfer 600,000,000 Yen to your child without attracting gift or inheritance taxes. The scheme involves borrowing a further 400,000,000 Yen from the bank, and buying 1,000,000,000 Yen worth of high rise manshon under a company structure, and passing the company shares to your children, leveraging the large discrepancy between ways of regarding the value of that real estate for tax purposes compared to actual prices (buildings are undervalued by about 40 to 60%, land by about 20%). The reason to choose a high rise manshon is that share of land becomes minuscule. Further, there is an additional discount for rental properties which is available to you. In that case given, the valuation of the 1,000,000,000 Yen property was assessed at 200,000,000 Yen, and since this was less than the loan of 400,000,000 Yen outstanding, the valuation for gift tax purposes was zero.

Although there is a risk of real estate dropping in value, it was regarded to be better than the over 300,000,000 Yen in tax which would have been levied on a gift of cash.

The Kansai industrialist who performed this transaction on the advice of his tax accountant is quoted as saying "It is practically money laundering*! It helped me and my son!"


In another scheme, the article goes on to suggest adopting your grandchildren, so that they become your children for inheritance tax purposes. This one in particular solves the issue for one generation but increases the issues for all the others, in my view.

* edit: Actual quote is "It is practically alchemy." I couldn't help changing one character of the Japanese to say what he really meant.

[legion]

At my company we just had a presentation from our auditors on the new tax laws and how they affect us foreigners. Part of the company's due diligence.

It was an interesting meeting. The rich expats we have who are obviously from wealthy families were shocked to find if they inherit or receive assets abroad while resident in Japan they are liable for tax in Japan under Japan's inheritance tax laws. As we know, inheritance tax in Japan is punitive, the top rate is 55% and the threshold was lowered to 30 million yen.

You have 10 months from date of death to pay. If you pay later they add interest.

Unlike other countries where the tax is the burden of the deceased, in Japan it is the burden of the inheritor. If you have a jusho in Japan, you pay.

And tax offices talk to each other. If you try and hide it and you are caught they will screw your ass.

The take out was that the wealthy expats will probably be looking to exit the country ASAP if their parents are getting on in years, and Japan will probably become the country to avoid for the well heeled floaters. A couple of our guys said if they knew in advance they would not have come.

Do not expect your embassy to give a shit, because like fingerprinting, they are exempt. I repeat, do not expect the smug fucks at the embassy or to give a shit when the Japanese tax office strips you of half of your inheritance.

If you are a Brit, do not expect your spineless and supine government to give a shit that Japan has unilaterally decided it is entitled to assets earned by people with no connection to Japan other than one of their children works there. Because the only thing the supine British government gives a shit about is Liz & co.

You are best off staying on a working visa if you are on one, if you are on a spouse visa or PR and choose to leave Japan you will pay an exit tax on assets.

So most of us are fucked.

And I think it is deliberate, they have seen they can use this as a tool to get foreigners to avoid putting down roots in Japan. Just like they want the SE Asian nurses to come for a few years then fuck off, they want the rest of us to do the same.

If you want more detail talk to a professional.

All your base are belong to us

[Russell]

At my company we just had a presentation from our auditors on the new tax laws and how they affect us foreigners. Part of the company's due diligence.

It was an interesting meeting. The rich expats we have who are obviously from wealthy families were shocked to find if they inherit or receive assets abroad while resident in Japan they are liable for tax in Japan under Japan's inheritance tax laws. As we know, inheritance tax in Japan is punitive, the top rate is 55% and the threshold was lowered to 30 million yen.

You have 10 months from date of death to pay. If you pay later they add interest.

Unlike other countries where the tax is the burden of the deceased, in Japan it is the burden of the inheritor. If you have a jusho in Japan, you pay.

And tax offices talk to each other. If you try and hide it and you are caught they will screw your ass.

The take out was that the wealthy expats will probably be looking to exit the country ASAP if their parents are getting on in years, and Japan will probably become the country to avoid for the well heeled floaters. A couple of our guys said if they knew in advance they would not have come.

Do not expect your embassy to give a shit, because like fingerprinting, they are exempt. I repeat, do not expect the smug fucks at the embassy or to give a shit when the Japanese tax office strips you of half of your inheritance.

If you are a Brit, do not expect your spineless and supine government to give a shit that Japan has unilaterally decided it is entitled to assets earned by people with no connection to Japan other than one of their children works there. Because the only thing the supine British government gives a shit about is Liz & co.

You are best off staying on a working visa if you are on one, if you are on a spouse visa or PR and choose to leave Japan you will pay an exit tax on assets.

So most of us are fucked.

And I think it is deliberate, they have seen they can use this as a tool to get foreigners to avoid putting down roots in Japan. Just like they want the SE Asian nurses to come for a few years then fuck off, they want the rest of us to do the same.

If you want more detail talk to a professional.

All your base are belong to us

So, will 55% be levied on 30 million already?

Or is that the top rate for, say, above 100 million or so?

[wagyl]

I still think the real target is the many rich Japanese who invested in real estate overseas during the bubble years. The bubble investor generation is starting to visit the crematorium around about now. We are just collateral damage.

It is not the job of consulate staff to act to nullify the laws of the sovereign state in which they and their citizens find themselves. Whatever made you think that it was?

[wagyl]

So, will 55% be levied on 30 million already?

Or is that the top rate for, say, above 100 million or so?

Much more complex than that. This is the most detailed thing I found, and I have not found anything which points to the method being incorrect. viewtopic.php?f=11&t=30700&start=30#p355397
But basically the top rate kicks in for estates of 600 million Yen, if there is only one beneficiary. viewtopic.php?f=11&t=30700&p=368217#p368217

I would say "read the fucking thread" but I have exceeded my anger quota for today already

[legion]

So, will 55% be levied on 30 million already?

Or is that the top rate for, say, above 100 million or so?

You start paying tax on anything you inherit over 30 million, the starting rate is 10%.

[legion]

I still think the real target is the many rich Japanese who invested in real estate overseas during the bubble years. The bubble investor generation is starting to visit the crematorium around about now. We are just collateral damage.

It is not the job of consulate staff to act to nullify the laws of the sovereign state in which they and their citizens find themselves. Whatever made you think that it was?

The British consulate is there to defend British interests, not British subjects. Like I said, don't expect anything from them.

But it is an interesting question of sovereignty, the Japanese are saying they are entitled to assets of foreigners who lived and died abroad. Under British law the tax burden is placed on the deceased before the assets are inherited, the Japanese are claiming their law trumps this, on assets in the UK. So the Japanese are nullifying British inheritance tax law.

I agree we are being caught up in the net aimed at the rich Japanese who tried to evade Japanese tax by running away to Singapore. I also think it is pathetic that the Japanese voter is so apathetic they do not force the change the British tax payers did to greatly reduce the burden of inheritance tax on the general population. Abe talks about trying to kick start the economy while increasing the tax burden on almost everyone.

I think this explains the continual deflation of land prices in the countryside, ojisan dies, to try and hold the farm together son sells off some of the land, everyone knows he only has 10 months, so he gets screwed on the sale.

In Tokyo ojisan dies, land is valued at n-oku en, family does not have the cash, has to sell land, house on it is a liability, family gets screwed on the sale, concrete gets poured, 4 more pencil houses.

[Russell]

So, will 55% be levied on 30 million already?

Or is that the top rate for, say, above 100 million or so?

Much more complex than that. This is the most detailed thing I found, and I have not found anything which points to the method being incorrect. viewtopic.php?f=11&t=30700&start=30#p355397
But basically the top rate kicks in for estates of 600 million Yen, if there is only one beneficiary. viewtopic.php?f=11&t=30700&p=368217#p368217

I would say "read the fucking thread" but I have exceeded my anger quota for today already

Thanks Wagyl.

And take it easy!

[Coligny]

So... Can I get paid if I inherit my mom's drinking debts ?

[wagyl]

But it is an interesting question of sovereignty, the Japanese are saying they are entitled to assets of foreigners who lived and died abroad. Under British law the tax burden is placed on the deceased before the assets are inherited, the Japanese are claiming their law trumps this, on assets in the UK. So the Japanese are nullifying British inheritance tax law.

The United Kingdom (and most of the rest of the world) has made a decision to levy tax on the estate of the deceased. The tax is paid by the estate before behests are made to the beneficiaries. Japan has (I think uniquely) decided to levy tax on the beneficiaries (jointly and severally) and the tax is paid by the beneficiaries who happen to be tax-resident once the behests have been made. Japanese are not usurping British law: Britain still gets it's take. Are you suggesting that the sovereign nation of Japan should be denied power to levy taxes on people of non-Japanese nationality? It is no longer the days of the Blackships, what hey, old chap! Can I go to the UK and work there tax free?

[Wage Slave]

So, will 55% be levied on 30 million already?

Or is that the top rate for, say, above 100 million or so?

You start paying tax on anything you inherit over 30 million, the starting rate is 10%.

If you are an only child. If you have siblings then that number increase for each. I can't remember by how much now - was it 8 million a sibling?

[wagyl]

if you are on a spouse visa or PR and choose to leave Japan you will pay an exit tax on assets.

By the way, first I have heard of this. I don't expect more info immediately because this is just a report on "what some consultant dude told my workplace" but if anyone comes across a concrete source of information for this please post here.

[Wage Slave]

Under British law the tax burden is placed on the deceased before the assets are inherited, the Japanese are claiming their law trumps this, on assets in the UK. So the Japanese are nullifying British inheritance tax law.

Not quite true. Inheritance tax is levied on the estate - ie the money available for distribution to the heirs. Remember too that there is still a double taxation agreement. Any tax paid in the UK can be used to offset the bill in Japan. The difficulty is that if you are an only child then the UK tax free allowance is much higher than in Japan.

[Wage Slave]

if you are on a spouse visa or PR and choose to leave Japan you will pay an exit tax on assets.

By the way, first I have heard of this. I don't expect more info immediately because this is just a report on "what some consultant dude told my workplace" but if anyone comes across a concrete source of information for this please post here.

News to me too. Perhaps it just means you are required to settle up when you leave or at least at the end of that tax year. Which seems fair enough to me.

[chibaka]

if you are on a spouse visa or PR and choose to leave Japan you will pay an exit tax on assets.

By the way, first I have heard of this. I don't expect more info immediately because this is just a report on "what some consultant dude told my workplace" but if anyone comes across a concrete source of information for this please post here.

News to me too. Perhaps it just means you are required to settle up when you leave or at least at the end of that tax year. Which seems fair enough to me.

So what if someone just fucks off home, Taro from the tax office is going to follow? Almost as much paranoia as the nipponjin my number bollocks.
Surely depends on where FG stashes his cash does it not?

[Wage Slave]

if you are on a spouse visa or PR and choose to leave Japan you will pay an exit tax on assets.

By the way, first I have heard of this. I don't expect more info immediately because this is just a report on "what some consultant dude told my workplace" but if anyone comes across a concrete source of information for this please post here.

News to me too. Perhaps it just means you are required to settle up when you leave or at least at the end of that tax year. Which seems fair enough to me.

So what if someone just fucks off home, Taro from the tax office is going to follow? Almost as much paranoia as the nipponjin my number bollocks.
Surely depends on where FG stashes his cash does it not?

Perhaps, but that would mean burning your bridges. Rarely a smart move in my experience.

[chibaka]

if you are on a spouse visa or PR and choose to leave Japan you will pay an exit tax on assets.

By the way, first I have heard of this. I don't expect more info immediately because this is just a report on "what some consultant dude told my workplace" but if anyone comes across a concrete source of information for this please post here.

News to me too. Perhaps it just means you are required to settle up when you leave or at least at the end of that tax year. Which seems fair enough to me.

So what if someone just fucks off home, Taro from the tax office is going to follow? Almost as much paranoia as the nipponjin my number bollocks.
Surely depends on where FG stashes his cash does it not?

Perhaps, but that would mean burning your bridges. Rarely a smart move in my experience.

I thought I replied to [settle up when you leave], that's bridges nuked in my book, not just a jolly to Bankok