Frequently Asked Questions
The “10-Year Rule” — How Far Japanese Inheritance Tax Reaches Overseas Assets
“10-year rule” is not statutory language. It is shorthand for the taxpayer categories in Article 1-3 of the Inheritance Tax Act. The test combines who acquired the property with what kind of person the decedent was, and nationality and address history both matter. What follows is limited to what the National Tax Agency actually publishes.
If I have no address in Japan, is what I inherit subject to Japanese inheritance tax?
In principle, only the assets located in Japan are subject to Japanese inheritance tax.
This is the default, not the whole rule. Where one of the exceptions below applies, overseas assets are taxed as well. The test is applied as of the start of the inheritance — that is, the time of death.
Source: 国税庁 タックスアンサー No.4138
When do overseas assets become taxable?
The National Tax Agency states that overseas assets are also taxable where the person acquiring the property falls into any of the following.
- A person who holds Japanese nationality at the time of acquisition and who has had an address in Japan at any point within the 10 years before the date of the decedent’s death;
- A person holding Japanese nationality who has not had an address in Japan during that period, where the decedent was neither a “foreign decedent” nor a “non-resident decedent”;
- A person who does not hold Japanese nationality, where the decedent was not a “foreign decedent”, a “non-resident decedent”, or a “non-resident foreign national”.
The “10 years” everyone refers to is this period. For a national, the address history in the ten years before death determines how far the tax reaches.
Source: 国税庁 タックスアンサー No.4138
How are “temporary resident”, “foreign decedent” and “non-resident decedent” defined?
The National Tax Agency defines them as follows. Each turns on residence status and address history.
Temporary resident
A person who holds a residence status under Appended Table 1 of the Immigration Control and Refugee Recognition Act at the start of the inheritance, and whose total periods of having an address in Japan within the 15 years preceding it amount to 10 years or less.
Foreign decedent
A decedent who, at the start of the inheritance, held a residence status and had an address in Japan.
Non-resident decedent
A decedent with no address in Japan at the start of the inheritance who either (i) had an address in Japan at some point within the preceding 10 years but held no Japanese nationality at any of those times, or (ii) had no address in Japan at all within those 10 years.
“10 years or less within 15 years” and “within 10 years” are different tests. Conflating them changes the category, so check the year counts against the statutory wording.
Source: 国税庁 タックスアンサー No.4138
Does a temporary absence — an overseas posting or study abroad — mean I have no address in Japan?
No. The National Tax Agency states that a person temporarily away from Japan, such as for study abroad or an overseas business assignment, is treated as having an address in Japan.
“Address” is determined by where the base of daily life actually is, not by whether a residence record has been moved. Arranging the formalities of departure does not by itself end an address in Japan.
Source: 国税庁 タックスアンサー No.4138
Where can I see the full taxpayer category table?
It appears as a table in the body of National Tax Agency Tax Answer No.4138.
We do not reproduce that table here. Borderline cases — a change of residence status, a death shortly after departure, dual nationality — turn on how the table is read, so go to the primary source and to a qualified professional.
Source: 国税庁 タックスアンサー No.4138、国税庁 タックスアンサー No.4102
What this page does not cover
It does not cover how much tax is due, how the basic deduction and tax credits apply, or how to complete a return. Those fall under Article 2 of the Certified Tax Accountant Act and are handled by our partner licensed tax accountants. What we work on is the structural side: how the conditions that determine the taxable perimeter — address, nationality, residence status, holding entity — are arranged before an inheritance occurs.
Primary sources
Related services and questions
- Succession Structuring
- China–Japan Cross-Border Wealth Structure
- Which country’s law governs a cross-border inheritance
- Overseas asset reporting and CRS
Get in touch
If address, nationality or residence status is about to change the taxable perimeter, most of the design room still exists before the inheritance occurs. ceo@seisei.tokyo
SEISEI provides financial and management consulting. It does not constitute tax representation, preparation of tax documents, or tax consultation as defined in Article 2 of Japan’s Certified Tax Accountant Act. Filings and tax computations are handled by partner licensed tax accountants (zeirishi).