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But sorry girls, only for boys  

UK ers. Did you know:

 

- you are married, wife is Japanese

- you have UK passport but live and will live in Japan all your life. The UK passport is the point

- you own stuff only in Japan

- when you die, all your assets will be subject to UK inheritance tax laws, NOT Japan inheritance tax laws.

 

Or so I have been told.

 

Big question is - would Japan want to take a chunk too? (Surely not).

 

This is the first hit I got when I looked but it suggests UK inheritance tax liability is based on domicile. From what it says, you don't get to choose where you have a UK domicile and instead its based on tests like whether you own a house or have permanent residency in the other country. If you don't have a UK domicile, you are not liable for UK inheritance tax on non UK assets.

 

http://www.telegraph.co.uk/finance/personalfinance/expat-money/9883829/Inheritance-tax-u-turn-expats-must-plan-ahead.html

 

This info may be wrong, of course. If you get it checked out, please let us know what you are told.

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I will try of find more, but the person I was speaking to was a solicitor who deals in this kind of thing in a suit sitting in his office. It wasn't down the pub.

 

This 'domicile' thing seems more rooted in the country on my passport than where I live.

 

The guy seemed fairly sure about the basics of above but did say that further investigation was recommended (but would have cost).

 

So would be good to know actually what the reality is.

 

But I was thinking, as UK inheritance is nothing on the first 325000 pounds, but Japan takes from the first yen, it might not be such a bad thing.....if there's no double dipping,

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Thanks for the info!

 

I had another look but the six or seven articles I saw about UK expats all focused on domicile, not the passport. This first one describes some of the evidence used to judge domicile

 

http://www.yourexpat...-tax-expats.htm

 

The following article has some info about non UK-dom spouses, who get an extra allowance. So it would be 325000 times two anyway. By electing to become UK domiciled, a spouse can become completely exempt by the sounds, although that sets off a time bomb for when he/she dies.

 

http://www.turcancon...married-couples

 

I know very little about inheritance tax in Japan, but I think the allowance for a spouse, which is unlimited in the UK, is something like 160 million yen. So in your example situation, close to a million quid wouldn't be taxed on the Japan side.

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I guess the question is, will Japan really cede the right to decide who gets what, and taxed at what rate, to a foreign government just because one of their newly-deceased permanent residents has bought the farm while holding a foreign passport? I'm finding that hard to swallow somehow. (And don't think they should, for that matter.)

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I reckon assets in Japan will be subject to Japanese inheritance tax regardless of whether gaijin or Japanese own them, and regardless of who lives where. Although you may have heard Japanese people moan about them as if they are the worst thing ever, Japanese inheritance taxes are not high by global standards. Most Japanese taxes aren't. The government just prints all its money instead.

 

I think the issue here is whether a foreign government will also get some inheritance tax on such Japan-based assets. It sounds like the UK government won't if you aren't domiciled here, though that might be difficult to prove if you've not been here for very many years. UK inheritance tax is way higher than Japan's.

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I was also advised about the UK domicile thing, but also to check up on it in Japan.

:doh:

Obviously some clear and correct info is needed on this particular subject as no-one seems to know how it all works.

Pretty important stuff though!

 

Yes UK is 0% on first 325000 (or is it 315000) and between a couple double that. They are talking about raising it to 1 million as since that level was set, tons more people are in that bracket with house prices etc more.

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UK is 0% up to 325000 quid, right?

Double that if a couple.

Unless you are rather wealthy, Japan is surely more expensive.

 

For a spouse in Japan, the exemption is 160 million yen, which is over 900,000 pounds (for a UK domicile spouse its unlimited, but that's not the case we've been talking about).

 

UK inheritance tax is also nearly 40% as soon as you start paying it. I don't think the Japanese one starts anything like as high as that.

 

I also get the impression that houses are not given high valuations for taxation purposes in Japan. Certainly not market value. Houses are the main issue with inheritance taxes for ordinary folks in the UK.

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That 160 million yen. That means that with a married couple, one of them dies and anything up to the value 160 million yen there's nowt to pay?

 

I'm terrible with legal talk. All the odder considering it's all round me all day at work!

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Found out a bit more about the UK - Japan funk.

 

More research needed but it seems to be there isn't an agreement between the countries regarding inheritance tax.

 

But. With regards to the domicile thing.... it is apparently 'difficult to shake off' domicile (ie. the passport holding so you are UK domicile), however if you have lived somewhere for a long time with long-term commitments (marriage, house, job, etc) then there's a good chance that you will be seen as domicile in the country where you have those commitments. Meaning that you would be liable for UK inheritance tax on UK stuff, and Japan inheritance tax on Japan stuff. I was told that it would be a high percenctage chance of that been seen as the case, though not 100%. And obviously it would be a case-by-case thing.

 

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