Inheritance tax relating to a foreign national in Japan.(OldInformation)

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In this page, I explain about inheritance tax in Japan.

In the case a American person died outside of Japan. He did not have any experience to live in Japan. His son ( herein after referred to Tom ) has lived in Japan for 1 year. He has a family in Japan and works as an English teacher in Japan.
In this case, he shall be deemed that he has domicile in Japan.
( In the case he has lived in Japan only for one month, if he works as full time employee and does not have any residence outside of Japan, he will be deemed that he has domicile in Japan. )

And when Tom’s father died, he inherited some properties.

In this case, he needs to calculate the amount of inheritance tax in Japan.

Even if the property inherited by Toms is located outside of Japan, as far as Tom inherited it, he needs to calculate the amount of inheritance tax in Japan.

In the case a property is located outside of Japan, he needs to convert the value into Japanese yen.

If assessed value of a real estate located in United States is $1, he needs to report the value of the real estate something like 120 yen.

In the case, a inheritee and / or a heir has domicile ( 住所 ) in Japan, as for calculation of inheritance tax, civil code of Japan shall be applied.

In the case, a heir who does not have domicile in Japan inherits a property, he needs to calculate inheritance tax as far as the property is located in Japan.

1 However, in the case a heir has Japanese nationality and if a inheritee or heir has domicile  in Japan prior to day of inheritance, this heir needs to submit a report as for property that is located outside of Japan.

2 In the case a heir does not have Japanese nationality and a inheitee has domicile in Japan,  this heir needs to submit a report as for property that is located outside of Japan.

(Notice)

In the case a person leaves Japan temporarily like studying abroad or business trip, he is deeded that he has domicile in Japan.

As for provision of 2、this shall  apply only in the case day of inheritance is after April 1st 2013.

Example of calculation of inheritance tax.

In the case Nancy is in Japan for several years as a salaried employee. In September 1st,2015, her father Jack ( He does not have Japanese nationality and any experience to live in Japan. ) died.
Nancy inherited property that is located outside of Japan. Nancy has father ( Jack ) and mother  and one sister.

According to this inheritance, Nancy’s mother inherited a property for 200 million yen, Nancy and her sister inherited a property for 100 million yen.

In this case, she needs to calculate the amount of inheritance tax.

Nancy has domicile in Japan.
In that case,  she needs to submit a report of all properties that is located in the world.

Nancy’s mother and sister do not have Japanese nationality and domicile in Japan. And they do not inherit property that is located in Japan. So, they do not need to submit a report to competent agency in Japan.

Nancy needs to calculate the amount of inheritance tax based on civil code of Japan.
So, range of heirs at  law is determined by civil code of Japan.
National law of Jack is not applied to this calculation.

The amount of basic deduction from taxable income : 30 million yen + 6 million yen × 3 persons = 48 million yen.
( The amount of basic deduction and tax rate were changed in January 1st, 2015. )

Nancy inherited a property worth 100 million yen that is located outside of Japan.

So, 100 million yen – 48 million yen = 52 million yen.

😐 Provisional amount of property inherited by each person.

Nancy’s mother : 52 million yen × 1/2 = 26 million yen.
Nancy’s sister : 52 million yen × 1/4 = 13 million yen.
Nancy : 52 million yen × 1/4 = 13 million yen.

Provisional amount of inheritance tax

Nancy’s mother : 26 million yen × 15 % ( tax rate ) – 500,000 yen (  tax exemption ) = 3.4 million yen.
Nancy’s sister : 13 million yen × 15 % ( tax rate ) – 500,000 yen (  tax exemption ) = 1.45 million yen.
Nancy : 13 million yen × 15 % ( tax rate ) – 500,000 yen (  tax exemption ) = 1.45 million yen.

Total amount of provisional inheritance tax : 3.4 million yen + 1.45 million yen + 1.45 million yen = 6.3 million yen.

Inheritance tax levied on Nancy is
6.3 million yen × 100 million yen / 100 million yen = 6.3 million yen.

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