probate

Inheritance tax in Japan is progressive.  Therefore the exact value of the inherited assets must be clear before the tax can be accurately calculated.  For some assets, like bank accounts, this valuation is easy.  In other cases, like real property, the value can be less clear.  In general, inheritance tax for real property will usually be calculated based upon the value used for property tax purposes.

Sometimes a will specifies that part of the estate should be given to a religious organization or a charity.  In these cases, if the inheritor meets certain conditions, the religious organization or charity may not need to pay any inheritance taxes.  This rule encourages people to leave their money to charities or other worthwhile causes.

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.

The advantage of drafting a will in Japan is that the drafter can choose who to give his or her assets to and in what amounts.  However, there are limits on how freely property can be distributed after death in Japan.  Japanese law dictates that, regardless of what is stated in a will, spouses and children are entitled to part of the decedent’s estate.  This minimum is set by law and can be claimed by spouses and children upon request to the court.