At SANKOTSUYAMA, we offer free consultations on inheritance tax returns and tax accountants. These individual consultations are available over the phone or in person at the funeral home, Kamakura Gokurakuji Temple. While free, these consultations require time, so please schedule a time in advance. Your consultation will be handled by Shohei Hayashi, who runs a tax accountant's office specializing in inheritance tax in Setagaya Ward, Tokyo. Until last year, Mr. Hayashi served as an executive at a major tax accounting firm specializing in inheritance tax, where he has handled over 1,000 inheritance tax returns and pre-death planning. He currently provides support to families while developing an environmentally friendly, paperless filing system. Inheritance tax is a tax levied on assets such as money and land inherited from deceased parents or spouses. However, not all inheritors are subject to inheritance tax. First, you must determine whether inheritance tax applies. All assets owned by the deceased at the time of their death are subject to inheritance tax. This includes all assets with monetary value, such as cash, savings, stocks, and other securities, land and buildings, as well as golf club memberships, loans, patents, and copyrights. When assets are acquired through inheritance, any assets received as gifts from the deceased within seven years prior to the start of the inheritance are also subject to inheritance tax. Life insurance benefits and death benefits are also considered inherited and subject to inheritance tax. However, a certain amount (5 million yen x the number of legal heirs) of life insurance benefits and death benefits is tax-exempt. Loans, unpaid debts, and taxes paid by the deceased are also deductible. Items used for daily worship, such as cemeteries, gravestones, Buddhist altars, and Shinto implements, are also exempt from tax. However, purchasing a cemetery or Buddhist implements for the deceased using inherited savings after the death of an heir is not considered tax-exempt. Funeral expenses can be deducted from the value of the inherited assets if the heir inherits debts from the deceased. You can also deduct funeral expenses, such as payments to temples and funeral homes, and wake costs. However, funeral expenses do not include the cost of purchasing a gravestone or gravesite, or the cost of condolence gifts or memorial services. Inheritance tax is not always levied when inheriting property. However, inheritance tax is levied only when the taxable value of the estate exceeds the basic exemption amount, and you are required to file an inheritance tax return. If you fail to pay inheritance tax, the National Tax Agency may seize your property. This primarily involves real estate, but in some cases, personal property such as money and furniture may also be seized. The property is auctioned and converted into cash, and the proceeds are used to pay inheritance tax and late fees. A certain amount of your salary will be seized, and a seizure notice will be sent to your employer. The deadline for paying inheritance tax, like filing a tax return, is 10 months from the date of inheritance (the day after you learn of the death of the deceased). As a general rule, there are no extensions allowed for the inheritance tax return deadline, so failure to pay can result in heavy penalties. Furthermore, inheritance tax is generally paid in cash in one lump sum, so you must have the funds to pay by the filing and payment deadline. Deferred inheritance tax payments are subject to penalties such as late payment penalties and surcharges. Late payment penalties are considered late interest, so the longer the period of delinquency, the higher the tax amount. The tax office uses the National Tax Agency's KSK (National Tax Comprehensive Management) system to obtain all information regarding the deceased's assets. Inheritance tax evasion is always discovered during a tax audit. If you absolutely cannot pay inheritance tax, consider renouncing your inheritance. Renuncing your inheritance means you were never an heir to begin with, meaning you will no longer be able to inherit assets such as savings and debts, eliminating the need to file and pay inheritance tax. Renunciation of inheritance must be filed with the family court, and the deadline is within three months of learning of the start of the inheritance. Filing inheritance tax can be complicated, but SANKOTSUYAMA offers free consultations on inheritance tax returns and tax accounts, so please contact us if you would like assistance. |
