Do foreign heirs have to pay Japanese inheritance tax?

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The burden to pay Japanese inheritance tax falls on the heirs, not on the estate itself.  However, in some cases, the heirs may not live in Japan and therefore would not normally be subject to Japanese tax.  Therefore, for inheritance tax purposes, non-resident heirs are considered “limited taxpayers” and are subject to tax on any assets they inherit located in Japan.

On the other hand, in the circumstance where both the heir and the inherited property are outside of Japan, Japanese inheritance tax usually does not apply.  It should be noted that there are exceptions to this rule, such as when the heir is a Japanese citizen, and it is important to discuss inheritance tax with an attorney and accountant during the probate process.

If you have any questions about probate in Japan, please contact our office for a legal consultation.