How inheritance tax works in Japan
Japan calculates inheritance tax on the net value of inherited and bequeathed assets after permitted deductions, debts and funeral expenses, with certain lifetime gifts and settlement-at-inheritance gifts added under the statutory rules. The basic exemption is ¥30 million plus ¥6 million multiplied by the number of statutory heirs.
The inheritance-tax rate table runs from 10% to 55% and is applied to each statutory heir's deemed share to calculate the total tax, which is then allocated among the actual recipients. The top 55% rate applies above ¥600 million of a statutory heir's taxable share.
A surviving spouse can generally receive a tax credit so that no inheritance tax is due on the amount actually inherited up to ¥160 million or the spouse's statutory share, whichever is larger. The exemption requires the inheritance-tax return and supporting documents where filing is required.
Qualifying residential and business land can receive the small-residential-lot or small-business-lot reduction, commonly an 80% valuation reduction within statutory area limits. It is a technical relief, not an automatic deduction for every home or rental property.
A person with an address in Japan will often bring worldwide inherited assets into scope, while a non-resident may be limited to Japanese-situs assets in some expatriate cases. Japanese nationality, residence during the preceding ten years, temporary-resident status, and whether the decedent or donor was a foreigner or non-resident can change the result.
A return and payment are generally due within ten months from the day after the taxpayer learns of the death, usually the day after death. Japanese inheritance tax is separate from probate, civil-law succession, valuation, registration and any foreign estate or inheritance tax.
Inheritance tax brackets in Japan
| Bracket | Rate | Notes |
|---|---|---|
| Up to ¥10,000,000 of statutory share | 10% | |
| ¥10,000,001 - ¥30,000,000 | 15% | Less ¥500,000 |
| ¥30,000,001 - ¥50,000,000 | 20% | Less ¥2,000,000 |
| ¥50,000,001 - ¥100,000,000 | 30% | Less ¥7,000,000 |
| ¥100,000,001 - ¥200,000,000 | 40% | Less ¥17,000,000 |
| ¥200,000,001 - ¥300,000,000 | 45% | Less ¥27,000,000 |
| ¥300,000,001 - ¥600,000,000 | 50% | Less ¥42,000,000 |
| Above ¥600,000,000 | 55% | Less ¥72,000,000 |
Tax rates at a glance
- Inheritance tax range
- 10% - 55%Progressive
- Basic exemption
- ¥30m + ¥6m × statutory heirs
- Statutory share up to ¥10m
- 10%
- Statutory share ¥100m - ¥200m
- 40%
- Statutory share ¥300m - ¥600m
- 50%
- Statutory share above ¥600m
- 55%
- Spouse credit
- ¥160m or legal share
- Annual gift exemption
- ¥1.1 million
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
FamiliesExpatsProperty ownersInvestorsFamily offices
Watch out for
- The ¥30 million plus ¥6 million per heir basic exemption is calculated against the net estate and statutory-heir count. It is not a universal ¥30 million allowance for each beneficiary.
- The spouse credit is powerful but does not remove the need to model the second death. Passing a large estate to a spouse can defer tax while increasing the taxable estate on the next succession.
- The small-lot land relief has residence, ownership, use, relationship and area requirements. A property being a family home or rental property is not enough on its own.
- Japan's cross-border scope rules can extend beyond Japanese property. A foreign heir or donor, Japanese nationality, the ten-year residence history and the immigration status at the time of transfer must be checked together.
- Lifetime gifts can be pulled back into the inheritance-tax calculation under the calendar-year and settlement-at-inheritance systems. A ¥1.1 million annual gift-tax basic exemption is not a complete estate-planning safe harbour.
Frequently asked questions
Does Japan have inheritance tax?
Yes. Japan applies progressive inheritance tax from 10% to 55% after a basic exemption of ¥30 million plus ¥6 million for each statutory heir. The tax can cover worldwide assets in many resident and nationality situations.
How much can a spouse inherit tax-free in Japan?
A surviving spouse can generally use a credit covering the amount actually inherited up to ¥160 million or the spouse's statutory share, whichever is larger, provided the statutory filing and documentation conditions are met.
When is Japanese inheritance tax due?
The inheritance-tax return and payment are generally due within ten months from the day after the taxpayer learns of the death, usually ten months after the date of death.