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Inheritance Tax in the U.S. and Japan ／ Living Gifts

Differences between Gift and Estate Taxes in the U.S.

There seems to be a lot of talk recently in the news about changes to the estate tax in Japan. Since the inheritance tax in Japan is high and Tax Credit seems to be low, many people in Japan are quite concerned about the inheritance tax. We have seen several Japanese people in the U.S. asking about the Estate&Gift Tax.

Lifetime Gift Tax Exemption

The Lifetime Gift Exemption in the US as of 2021 is ＄ $11.7Million. This includes all living gifts and estates. You have to be a certain wealthy person to exceed it. Most Americans do not pay Estate Tax, so unless you are a millionaire in the US, estate ／ inheritance tax is of little interest.

The Annual Exclusion for living gifts is $ 15,000 （ per couple ） Tuition （ tuition ） and Medecal （ insurance ） are not eligible. Even if you exceed ＄ 15,000, the Life Time Gift Exemption will be applied, so you will not actually pay the tax, only your tax return. Therefore, the first thing that Japanese who have a relationship with the U.S. should pay attention to is whether or not Japanese prenatal and inheritance taxes will be involved.

If Japanese inheritance tax is not applicable

First, the assets are in the US. Inheritance （ Donation ） If the person and the decedent have not been in Japan for more than 10 years, Japanese inheritance tax will not apply. Also, if the heir has a Japanese address within 10 years and the decedent has not been in Japan for more than 10 years, Japanese inheritance tax is not applicable.

When Japanese inheritance tax is applied

First, if the assets are located in Japan, Japanese inheritance tax is applied regardless of the inheritance and decedent's situation. Also, if the heir is a resident of Japan, the Japanese inheritance tax will be applied to domestic and foreign assets regardless of the situation of the decedent. The Japanese government is quite strict on the inheritance tax. In recent years, there has been increased scrutiny of foreign assets. In light of the Japanese tax system, if a parent living in the U.S. makes a gift to a son （ living in Japan ）, it would be desirable to consider both the U.S. and Japanese tax systems and make sure that the gift does not exceed the limit of 1,100,000 yen ） in Japan.


The information provided in this column is for general and educational information only and is not intended to be a solution or legal advice for individual readers. Any questions regarding an individual reader's specific situation should be discussed with us in advance on a consignment agreement.


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  • Posted : 2025/03/16
  • Published : 2025/03/16
  • Changed : 2025/03/16
  • Total View : 83 persons
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