Tips for International Inheritance Tax

Inheritance

Unnecessary Concern of Japanese heirs  

We often see Japanese heirs get concerned about Japan’s inheritance tax when they hear they are entitled to the inheritance from the US. 

In fact. no Inheritance tax is imposed in Japan on the inheritance from the US.

In Japan, heirs pay inheritance tax.

However, in the United States, the deceased person (in fact, the executors of the deceased or the administrators of heritage) pay the tax. In other words, the inheritance tax will be taxed on the property after the expenses, etc., of the heritage management fee, is deducted. Therefore, heirs in Japan will inherit the heritage after the tax payment.

There is “the exemption of inheritance tax amount for overseas properties (foreign tax exemption).” Japanese heirs can avoid double inheritance tax both for the US and Japan. Inheritance tax will be deducted in the US from the remaining property. After the deduction, heirs in Japan inherit the after-tax inheritance from the United States.

By the way, the basic deduction of inheritance tax in Japan is “30 million yen + (six million yen X’s the number of statutory heirs)”. On the other hand, the basic deduction for inheritance tax in the United States is about 1.2 billion yen (1.118 million US dollars as of 2018).

Therefore, there is no payment of inheritance in the legacy below these amounts.

Also, there are no inheritance taxes in the following countries:

  • Singapore,
  • Hong Kong,
  • Malaysia,
  • Sweden,
  • Australia,
  • Switzerland,
  • Canada,

etc.

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