Inheritance tax in Japan: What you need to know

Planning a move to Japan from the UK? Perhaps you’re retiring there, or already have relatives that live there.

Whatever your plans, an important thing for UK expats to get to grips with is the country’s tax system. And if you plan to spend later life in Japan - or are expecting an inheritance from relatives living there - this means learning more about how inheritance tax works in the country.

In our essential guide, we’ll cover everything you need to know about inheritance tax in Japan. This includes who pays it, how to calculate it, rates, allowances, exemptions and much more.

We’ll also show you how to send large amounts of money securely between countries using the Wise Account. This can be extremely useful if you have inheritance tax to pay, or want to send money from an inheritance back to the UK.

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Table of contents

What is inheritance tax? Inheritance tax in Japan Who pays inheritance tax in Japan? Inheritance tax rates in Japan Taxable assets and exemptions How to calculate inheritance tax in Japan How to pay inheritance tax in Japan Wise - For big money transfers at life’s big moments FAQs about inheritance tax in Japan What is the inheritance rule in Japan? Is the spouse exempt from inheritance tax in Japan? Do foreigners pay inheritance tax in Japan?

What is inheritance tax?

Inheritance tax, known as IHT in the UK, is a tax paid to the government on the estate of someone who has died. The ‘estate’ usually encompasses all property and possessions, as well as savings, investments and pensions.

Many countries have inheritance tax systems. Depending where in the world you are, the tax may be known as estate tax, inheritance tax or succession tax.

However, not all countries have this kind of tax in place. New Zealand, Singapore, Portugal and Canada are among a handful of countries which don’t charge inheritance tax at all.¹ Some may instead have alternative systems, such as a transfer tax for properties.

Inheritance tax in Japan

Japan does have inheritance tax legislation, which applies on a national (rather than regional) level.

Unlike in the UK where inheritance tax is payable by the estate, in Japan it’s payable by each beneficiary individually. The number of heirs also affects the overall calculation.²

There is a tax-free allowance applied to the estate, above which inheritance tax will be due. Tax rates are set in tiers according to the value of the inheritance, regardless of the heir’s relationship to the deceased person.²

There’s also a tax credit available for spouses of the deceased - which could mean they don’t end up paying any inheritance tax at all.²

Who pays inheritance tax in Japan?

Japanese inheritance taxes are payable on all assets and property located in Japan, no matter whether the deceased person was a Japanese national or not.³

For assets located outside of Japan, inheritance tax will be due if:³

• The deceased person (donor) was a Japanese national domiciled in Japan or had been at any time over the last 10 years
• The donor was a foreign citizen domiciled in Japan on a Table 2 visa
• A recipient is a Japanese national domiciled in Japan or had been at any time over the last 10 years
• A recipient is a foreign national currently domiciled in Japan on a Table 2 visa or had lived in Japan for more than 10 out of the last 15 years on a Table 1 visa.

So if either the donor or recipient is considered a tax resident of Japan according to the conditions above, it means that Japanese inheritance tax will be due on worldwide assets.³

Each beneficiary will need to pay inheritance tax to the authorities. This is different to how it works in the UK, where a lump sum of tax is paid out of the estate.

It’s important to get professional tax advice to double check which country’s tax laws apply to you, especially if you live between countries or have property in multiple countries.

Inheritance tax rates in Japan

The Japanese inheritance system uses tax rates which vary depending on the value of the inheritance.

The total taxable estate has a tax-free allowance, and the heirs will pay tax on inheritances above this threshold.

The allowance is 30 million JPY, plus an additional 6 million JPY for every heir.⁴

Here’s a quick look at the current inheritance tax rates and deductions in Japan:⁴

Value of inheritance (JPY)	Inheritance tax rate	Deductions (JPY)
Up to 10 million	10%	0
10 million to 30 million	15%	500,000
30 million to 50 million	20%	2 million
50 million to 100 million	30%	7 million
100 million to 200 million	40%	17 million
200 million to 300 million	45%	27 million
300 million to 600 million	50%	42 million
600 million+	55%	72 million

Taxable assets and exemptions

Under Japanese inheritance laws, any assets located in Japan are considered to be taxable assets. Also, assets that are overseas but are owned - or received - by someone who is either a Japanese national or resident in Japan for tax purposes.³

There are a few exemptions, allowances deductions to know about with Japanese inheritance tax:²

• There is an allowance of 30 million JPY, plus 6 million JPY for every heir - this will be deducted from the overall taxable value of the estate
• There’s a Minor’s Credit of 100,000 JPY multiplied by the person’s age for heirs under the age of 18
• There’s a Disability Credit of 100,000 JPY multiplied by the person’s age (this can be up to 200,000 JPY for certain severe disabilities)
• Spouses pay no inheritance tax on amounts inherited that are up to 50% of the total taxable assets or 160 million JPY - whichever is greater.

The estimated value of real estate, possessions and money will be added up, along with the person’s debts (if any). Debts will be subtracted from the assets to come up with the total taxable value of the estate.

How to calculate inheritance tax in Japan

Here’s an overview of how Japanese inheritance tax can be calculated:²

1. The taxable net asset is calculated, by minusing the liabilities (debts) from the value of the inventory of assets. For real estate, a land valuation known as Rosenka is used. This is renewed every 3 years and is considered to be roughly 80% of the market value of the property.
2. The taxable net asset is then distributed between heirs, according to Japanese inheritance laws and the will of the deceased person.
3. The tax rate is applied according to the value of the inheritance received, the number of heirs and the fraction of the inheritance received by each heir.

How to pay inheritance tax in Japan

To pay inheritance tax in Japan, beneficiaries first need to file an inheritance tax return to the Japanese tax authority. But unlike in other countries where each individual files their own return, in Japan it's customary for all beneficiaries to be included on one tax return.⁵

This must be filed by a deadline of no more than 10 months after the date of death - or the date that beneficiaries were notified that they were required to file an inheritance tax return.⁵

You may need to contact the relevant Japanese authorities to find out about accepted payment methods.

If you’re living in the UK or another country, a solution such as Wise could be ideal for sending a payment for inheritance tax to Japan. You can send money worldwide with Wise, for low fees* and mid-market exchange rates. There’s even a dedicated service for securely sending large amounts.

Wise - For big money transfers at life’s big moments

After reading this, you should have a better idea of how the Japanese inheritance tax system works - and how it applies to you and your family. We’ve looked at personal allowances, rates, exemptions and who has to pay the tax.

We’ve also covered how to pay inheritance tax in Japan. If you need a way to pay inheritance tax, send inherited money back to the UK or generally manage your finances between countries - Wise is a great solution.

With Wise, you can hold and convert between 40+ currencies in your online account. And you can send money worldwide for low, transparent fees* and mid-market exchange rates.

If you’re sending a large sum between countries, read our quick guide on what documents you’ll need.

Whether you’re paying foreign bills or trying to get the best exchange rates when repatriating funds from overseas back to the UK, your Wise account can do it all.

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FAQs about inheritance tax in Japan

Here are some of the most common questions:

What is the inheritance rule in Japan?

When a person dies, Japanese law dictates that the spouse is the statutory heir and is entitled to at least 50% of the estate. If there are children, the remaining 50% of the estate will be shared.⁶

It’s important to note that this is only in cases where there is no will, or if the division of the estate or heirs is unclear.

However, it’s not usually possible to disinherit a spouse by way of a will.⁶

Is the spouse exempt from inheritance tax in Japan?

Spouses aren’t exempt from inheritance tax in Japan, but they are entitled to a sizable tax credit.

They won’t pay inheritance tax on amounts inherited that are up to 50% of the total taxable assets or 160 million JPY - whichever is greater.² This could mean that for some estates, the spouse won’t pay any inheritance tax at all.

Do foreigners pay inheritance tax in Japan?

Yes, if the property you inherit is located in Japan - or you are a tax resident of Japan yourself - it’s likely that you’ll need to pay Japanese inheritance tax.³

Tax can be extremely complicated though, so it’s recommended to get expert tax advice on what your obligations are.

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Sources used:

1. No More Tax - 10 jurisdictions with no inheritance tax
2. Leo Wealth - Overview of Japan’s Inheritance Tax for Foreigners
3. Withers - Private Wealth in Japan
4. PwC - Japan - Individual - Other taxes
5. Real Estate Japan - Blog - Explanation of Japan’s Inheritance Tax for Foreigners: By Plaza Homes
6. Gaijin Pot Blog - How Does Inheritance Work in Japan?

Sources last checked on date: 22-Jul-2025