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How to Reduce your Inheritance Tax Payment in Japan by Lifetime Gifting |
Introduction |
As the Japanese tax authorities have lowered the threshold for determining the basic deduction amount for the inheritance tax, many Japanese families face the possibility of being subjected to payment of the inheritance tax, even if they are an average family that is not particularly wealthy. Lifetime gifting in Japan can be a useful tool that families could utilize in order to reduce the payment of inheritance tax upon death, as calculated gifting during your lifetime can help reduce your overall asset value at death, upon which the inheritance tax will be ultimately levied. |
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Gifting of up to 1,100,000 JPY per year without being levied a Gift Tax |
As of 2024, the Japanese tax authorities allow an individual to make up to 1,100,000 JPY in gift, without it being levied a gift tax. The amount that exceeds the 1,100,000 JPY gift is subjected to the gift tax. For example, if a grandfather gifts 2,500,000 JPY to his granddaughter in a given year, the amount that exceeds 1,100,000 JPY (i.e. 2,500,000 JPY minus 1,100,000 JPY = 1,400,000 JPY) will be subjected to the gift tax in Japan. The tax rate to be applied differs based on the amount that remains after 1,100,000 JPY is deducted from the total gift amount. |
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Other Types of Gifting available in Japan |
In addition to the 1,100,000 JPY gift exemption amount, there are other types of gifting that are available in Japan that an individual could use in order to reduce the overall inheritance tax amount(s) that heir(s) of that individual would be subjected to after the gifting individual passes away.
For example, such an individual could provide funds/financial support to his/her spouse to purchase their family home, in an amount up to 20,000,000 JPY, where an amount not exceeding the former would not be subjected to the gift tax. Parents/Grandparents could also provide funds/financial support to their children/grandchildren in an amount not exceeding 10,000,000 JPY for the purchase of a home or a home reform, without it being subjected to the gift tax. Parents/Grandparents could also give up to 15,000,000 JPY in educational funds, an amount under which no gift tax will be levied. However, please note that there are certain requirements that must be met, etc. in order to be able to utilize the gifting options provided above. |
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Conclusion |
Because gifting can help reduce the amount of inheritance tax your heir (s) might be subjected to payment upon inheritance of your assets, it might be a good idea to learn about different gifting methods that are available in Japan. |
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Free Webinar on the Importance of Preparing Trusts in the United States in October |
Attorney Yuka Hongo is offering a free webinar in October for those interested in creating trusts in the United States as part of estate planning. Don't miss this opportunity to learn how trusts, asset protection, and estate planning tailored to your unique needs can benefit your family's future. The webinar will be held on Thursday, October 24, 2024. Click here to register. |
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Client Comments |
"Lawyers in the U.S. can be difficult to talk to at times, but I think people find it easy to talk to Ms. Hongo. I also like the fact that Ms. Hongo follows up with her clients on a timely basis." |
Sachiko Trillo, Honolulu |
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"Hongo Tsuji Tax & Consulting, our accounting firm, introduced me to Ms. Hongo. I consulted her with regards to estate planning, and I appreciated the fact that she took care of our documents in a timely manner." |
K.A., Tokyo |
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"I appreciated Ms. Hongo's professional expertise and the kind way in which she took care of our matter. I am truly happy that she helped us." |
Mitsuko Seto, Osaka |
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"Ms. Hongo not only prepared my trust, but also took care of legal matters involving my company. Her fee is reasonable and she follows up with you in a timely manner." |
S. Suzuki, Company Owner |
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"Ms. Hongo took care of our matter in a kind manner. We liked the fact that her office was located in Waikiki, near our home." |
Sugiyama, Waikiki |
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"I became a successor to 2 condominiums that my wife owned in Hawaii, after my wife passed away. Ms. Hongo took care of our probate matter in a short timeframe of 1 year. We feel very grateful to her." |
Shuichi Sakamoto, Nasu |
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"Our clients were very satisfied with Ms. Hongo's service because she was able to explain matters such as probate in an easy-to-understand manner. Ms. Hongo is someone we can rely on for any matter." |
Noboru Ohhashi, List Sotheby's, Tokyo |
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"Given that the U.S. real estate recording process and its pertaining laws differ from those of Japan, and it is difficult to learn about them in English, I appreciated Ms. Hongo being able to explain them to me in an understandable manner. I would like to seek her help in the future for other matters." |
K. Iwasaki, Honolulu |
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"Ms. Hongo helped me with the estate planning for my real estate in Hawaii. I was glad she was able to help me during her visit in Japan." |
S.T., Kawasaki |
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"It was our long-term goal to prepare a trust for our family. We are now able to take the next step in our lives, as Ms. Hongo applied her proficient bilingual skills to efficiently take care of our matter. We are very grateful for what she did for us." |
A.P., Honolulu |
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Attorney Yuka Hongo has been included as an honored listee in Marquis Who's Who for 2024. Marquis has chronicled the lives of accomplished individuals and innovators since 1898. |
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Hongo Law Office LLLC is proud to have been acknowledged as one of the "Best Probate Attorneys in Honolulu for 2024" by Expertise.com. |
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Attorney Yuka Hongo has been named a 2024 Elite Lawyer in the area of Estate Planning in Hawaii. The award recognizes attorneys who have displayed a high level of competence in their practice. |
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You're invited to call or email |
"If you have questions about estate planning and administration, please don't hesitate to call. I'll be glad to hear from you." – Yuka
Call (808) 237-9944 or email yuka.hongo12@gmail.com |
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Meet Yuka Hongo, Esq. |
Yuka Hongo is a respected estate planning attorney based in Honolulu, Hawaii. She has practiced law for 10 years and is fluent in both English and Japanese. |
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Practice Areas: Yuka represents clients in matters related to estate planning such as the preparation of trusts, wills, and Transfer on Death Deeds. She also provides a service in the area of estate administration, including probate.
Education: In 2000, Yuka graduated from Oberlin College (Oberlin, OH), where she earned a Bachelor of Arts Degree in Economics and East Asian Studies. In 2004, she graduated from Loyola Law School (Los Angeles, CA), where she earned her Juris Doctor Degree. In 2022, Yuka graduated from Keio University (Tokyo, Japan) where she earned a Master of Laws Degree.
Court Admissions and Bar Memberships: Yuka is a member of the Hawaii, California, the District of Columbia Bar, and New York Bar Associations. Yuka is a member of the International Law Section of the Hawaii State Bar.
Additional Qualifications: Yuka is a Certifying Acceptance Agent who can obtain the ITIN tax number for foreigners in the U.S. In addition, she is a life insurance agent and a licensed notary public in Hawaii. Also, Yuka is fully bilingual in Japanese and English and has in-depth experience including complicated translations working with both languages.
Multicultural Background: Yuka has experience living and working in both the U.S. and Japan and has a thorough understanding of both cultures and the people who live in both countries. In addition, she loves working with people from other multicultural backgrounds, and working on international matters.
Accounting Experience: Yuka worked for the Tokyo office of a prominent U.S. accounting firm for the past number of years and has extensive experience working with tax and legal issues that arise from cross-border transactions.
Educational Presentations: Yuka has presented seminars in Japan relating to Transfer on Death Deeds in Hawaii and trusts in the United States.
Residence & Interests: Yuka lives in Honolulu, Hawaii and is single. She enjoys scoping out new eateries and restaurants. |
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