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Foreign nationals and Inheritance tax in Japan ( This treatment is applied to gift tax, too. )

Conclusion : In the case a foreign national who has lived in Japan for 10 years or less within past 15 years, he does not need to pay gift tax for Japanese government. ( as far as objective of gift is not located in Japan )

Please be informed that if a person ( even if he does not have address in Japan ) has died and his heir,  ( Assumed Ms. H.  Even if she does not have address in Japan ) has inherited his property that is located in Japan, his property  is subject to inheritance tax in Japan.
However, depending on situation, even if the property is located outside of Japan, his property is subject to inheritance tax for Japanese government.
( In the case of Japanese national, even if the property is located outside Japan, all property is subject to inheritance tax for Japanese government, though there are exceptions. This article is written for non Japanese nationals)

Following sentences are related to persons who do not have Japanese nationality nor permanent resident in Japan.
Tax law has been changed in 2017 and this new law has become effective in 1st, April, 2017. So, in the case a person named Mr. D died in and after 1st, April, 2017, this new law is applied to his heirs. Assumed that Mr. D ( he does not have Japanese nationality and he does not have address in Japan at the time of his death) has died in 1st, April, 2017. He has heirs ( his spouse and children ) who are not Japanese national. His heirs do not have address in Japan. So, it looks like there is not relation between Mr. D and his heirs and Japan at the time of Mr. D’s death. However, if Mr. D had address in Japan for ten years or more before his death, Japanese government considers that he has still relation with Japan. So, if his heirs inherit certain amount of property, his heirs need to pay inheritance tax tax for Japanese government, even if the Mr D’s property is located outside of Japan. Otherwise, Mr. D will transfer his property to outside of Japan and Japanese government can not collect inheritance tax from his heirs. So, his heirs need to declare his property in and outside of Japan and submit tax filing. However, if Mr. D has lived in Japan for 10 years or less within past 15 years, his connection with Japan is not strong ( if he has permanent resident in Japan, his connection with Japan is strong. So, his property that is located outside of Japan is still subject of inheritance tax for Japanese government ). So, property that is located outside of Japan is not included in calculation of inheritance tax for Japanese government. Before 1st, April, 2017, situation was as below. If Mr.D’s heirs who do not have address in Japan nor Japanese nationality inherit property from Mr D ( he does not have address in Japan at the time of his death ), only property that is located in Japan should be subject to calculation of inheritance tax for Japanese government.

However after change of law, Japanese government back forwards past 10 years and collect inheritance tax from property that is not located in Japan. This treatment is applied to gift tax, too. 👹

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