【Case Studies】 Having recently moved to Japan does not automatically protect you from unexpected tax issues.

In certain cases, inheriting assets from parents in the United States can result in substantial Japanese inheritance tax.

In practice, once a person becomes a resident of Japan, even assets owned by parents overseas may fall under the scope of Japanese inheritance tax, leading to unexpected tax liabilities.

Mr. A, a U.S. citizen, moved to Japan with his Japanese wife and their two children, obtained a spouse visa and began living in Japan. Later, Mr. A’s parent in the United States passed away, and he became entitled to inherit U.S. real estate and financial assets. Mr. A and his wife assumed that Japanese tax would not apply because the assets were located in the United States.

However, depending on Mr. A’s visa status and residency situation in Japan, those U.S. assets may also be subject to Japanese inheritance tax. To make matters more complicated, no estate planning had been put in place in the United States, such as a trust or a will, so the estate had to go through probate.

As a result, the following issues arose:
• It took a long time and some cost to get a true and full picture of the estate
• Bank accounts remained frozen, and transferring real estate title was delayed
• The heirs could not freely access or use the inherited assets for a considerable period of time

Meanwhile, in Japan, an inheritance tax return must generally be filed within 10 months from the day after the heir becomes aware of the commencement of the inheritance.

In this case, before the U.S. procedures were completed, the Japanese filing deadline was already approaching, leaving the family facing a substantial Japanese inheritance tax bill without having secured sufficient funds to pay it.

If they had taken steps in advance—such as setting up a trust or preparing a will in the United States, confirming the Japanese tax implications, and estimating the potential inheritance tax exposure in Japan—they could likely have avoided much of the delay and financial disruption.

Three key points to keep in mind

1. A spouse visa or permanent resident status is highly likely to bring overseas assets within the scope of Japanese inheritance tax
Under Japanese inheritance tax rules, the scope of taxation varies depending on a person’s visa status and residency situation. For example, if you live in Japan on a spouse visa, overseas assets are likely to also become subject to Japanese inheritance tax.

2. Without proper estate planning in the United States, probate can take a long time
In the United States, if adequate planning has not been done during a person’s lifetime, inheritance procedures may be prolonged due to probate. As a result, it may take longer to identify, liquidate, or transfer assets, increasing the risk of missing Japan’s filing deadline.

3. Lifetime planning is important not only for reducing tax, but also for securing funds to pay the tax
In cross-border inheritance cases, it is not enough to estimate the tax amount alone. It is also essential to plan for when, how, and which assets will become available. By preparing measures such as establishing a trust in the United States, putting a valid will in place, estimating Japanese inheritance tax exposure, and planning how to secure funds for tax payment, heirs can significantly reduce their financial and procedural burden.

We strongly recommend seeking advice from tax accountants and attorneys who are well versed in the full process of international inheritance, so that appropriate lifetime planning can be put in place and future asset succession can proceed smoothly and painlessly. At Nagamine & Mishima Consulting, we take a comprehensive view of each client’s circumstances and provide tailored pre-inheritance planning support through a range of practical approaches.

Would you like to explore more detailed case studies?

We provide many real-world examples covering topics such as differences in the scope of taxation depending on spouse, permanent resident, or work visa status, common probate issues when inheriting U.S. assets, and filing obligations in Japan when overseas assets are involved.

Case Studies of International Inheritance

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