Many people don’t know or even think about inheritance laws until they are affected by them. They differ by country, and understanding inheritance laws in your native country can be challenging enough, let alone those of a country you’ve moved to. If you’ve settled in Japan, understanding inheritance laws and taxes can seem intimidating, and the language barrier plus the legal jargon make it confusing even if you have good Japanese skills. Here is some guidance on navigating inheritance in Japan so that if you are an heir, you can receive your fair share.
How Can I Avoid Inheritance Tax in Japan?
The Basics
First and foremost, the inheritance laws that apply depend on the nationality of the person who dies or the decedent. According to Article 36 of the Act on General Rules for Application of Laws, “inheritance is governed by the national law of the decedent.”
This means that Japanese law will govern if the decedent is a Japanese national, and if they are not, then the laws of the decedent’s country of nationality will apply. So, if you are a foreigner living in Japan, the laws in your country of citizenship will govern.
If the decedent is a Japanese national and leaves a will, the will divides the inheritance among the heirs. Otherwise, Japanese law determines the distribution of inheritance.
Heirs and Line of Succession
If there is no will or if the division among heirs is unclear, the co-heirs should ideally agree on how to divide the inheritance. If they cannot reach an agreement, Japanese law will determine the line of succession.
Spouse
If the decedent has a spouse, the spouse will be the statutory heir. It is not possible to disinherit your spouse. A partner to whom the decedent was not married or an ex-spouse will not be included.
Children
If there are children, the spouse will receive half the inheritance and the children will receive the other half. This half will then be divided evenly among the children. For example, if a spouse and two children survive the decedent, each child will inherit a quarter of the inheritance. If the decedent has no spouse, the entire inheritance will pass to their children and be divided accordingly.
All of the decedent’s children will have the same right to inheritance. This also includes adopted children and children born outside of marriage.
If the decedent is predeceased by their children but has grandchildren or great-grandchildren, then the inheritance will pass to them in the same way it would pass to their children.
Parents and Grandparents
If the decedent has a spouse but no children, then the spouse will receive ⅔ of the inheritance and the parent or parents will receive ⅓. If the decedent has no spouse, the entire inheritance will pass to their parents. In the instance that the decedent has no living parents but has a living grandparent or grandparents, then the inheritance will pass to them in the same manner.
Siblings
Unfortunately, siblings are the very last in the line of succession. If the decedent has a spouse but no children, living parents or grandparents, then the spouse will receive ¾ of the inheritance and the sibling or siblings will receive ¼. Without a spouse, the entire inheritance will go to the siblings. In the case that there aren’t any living siblings but there are nieces or nephews, the inheritance will pass to them.
No Statutory Heirs
If the decedent dies without any close family, then the court will need to appoint an administrator to manage the inheritance and determine heirs.
Keep in mind that this line of succession only applies if the decedent didn’t write a will and if the heirs cannot reach an agreement on the designation of inheritance. Otherwise, the will or an agreement will decide who is to inherit what. If there is still some dispute among the heirs based on the above inheritance procedures, then the heirs can petition to the family court to divide the inheritance.
How Heirs Are Taxed
Click here to read more.
- External Link
- https://gaijinpot.com/
6 Comments
Login to comment
Daninthepan
Worth pointing out that if you are a foreigner living in Japan for more than 5 years, you are considered a resident for tax purposes and are therefore liable for any inheritance you receive in your home country under the Japanese tax system. (Although you are allowed to reduce that amount by the amount you have already paid in your own country).
nandakandamanda
Useful article, worth keeping. Thanks Whitney.
Blacklabel
Yeah thanks for the time and effort put into capturing all this information.
wallace
If you are a permanent resident you have to declare foreign inheritance. Not a problem unless it's a large amount. Tax exemption is ¥30 million plus.
Speed
This is one of the most useful articles I've read in JT and unfortunately very timely for me. Thank you.
Yrral
Wallace,if you are married to.Japanese citizens,she do not get to exempt your American property from an inheritance tax ,your estate has to pay to the US government, American couples can exempt up to 20 million dollar in inheritance tax Google US Inheritance Tax