When an inheritance involves assets abroad, or you receive a gift from family or friends living overseas, deciding how far Japanese inheritance or gift tax applies is more complex than for a purely domestic case.
We can help if you
- expect to inherit from or receive a gift from parents living abroad
- are a foreign national in Japan planning for a future inheritance
- had a family member pass away with bank accounts or property abroad
- received a payout from an overseas life insurance policy
Is it taxable in Japan?
For inheritance and gift tax, we look at both the recipient and the giver (the deceased or the donor): whether each has a domicile in Japan, Japanese nationality, which visa they hold, and how long they have lived in Japan. The combination decides whether:
- all assets, in Japan and abroad, are taxable, or
- only assets located in Japan are taxable.
Temporary residents
A person living in Japan on a visa listed in Appended Table I of the Immigration Act (such as a work visa) who has had a domicile in Japan for 10 years or less in the past 15 years is a "temporary resident".
Being a temporary resident does not by itself exempt overseas assets. Overseas assets are excluded only if the giver is also a short-term foreign resident, or has no domicile in Japan (subject to conditions on past residence). For example, if you receive assets from a spouse who has lived in Japan for a long time, overseas assets are taxable even if you are a temporary resident.
Switching to a spouse visa (Appended Table II) after marrying a Japanese national also means you no longer qualify as a temporary resident.
Valuing overseas assets
- Foreign currency assets are generally converted at the TTB (telegraphic transfer buying) rate on the date of death or gift.
- Overseas property and unlisted shares often cannot be valued using Japanese methods directly, so valuations or local documents are used.
- Overseas life insurance payouts are subject to inheritance tax. In practice, however, the exemption of 5 million yen per statutory heir is considered not to apply to policies from foreign insurers.
If tax is also charged abroad
If overseas assets are subject to inheritance tax abroad as well as in Japan, the foreign tax can be credited against Japanese inheritance tax.
How we help
- Determine the tax obligationWe check the domicile, nationality, visa and residence history of both sides.
- Value the assetsWe value overseas assets under Japanese rules based on your documents.
- File the returnWe prepare and file the inheritance or gift tax return.
- Plan aheadWe help you think about how to hold or receive assets before an inheritance or gift.
Overseas probate and foreign tax filings are handled together with local professionals.
FAQ
Is money my parents send me from abroad always subject to gift tax?
Money for living or education costs given as needed is generally not subject to gift tax. For larger amounts, it depends on the situation of you and your parents. Talking to us before the transfer gives you more options.
Will the tax office know about transfers over 1 million yen from abroad?
Yes. Banks submit reports on international transfers to the tax office. Even when no gift tax is due, we recommend keeping records that explain the transfer.
This page provides general information only. The actual treatment depends on your individual circumstances. Please consult a professional before making decisions.