SEISEI INSIGHTS — Succession

Inheritance Tax: Up to 55% in Japan, Zero in China — The First Gap Chinese Families in Japan Run Into

2026-06-14

From Chinese families who own property back home and have also bought a house in Japan, we hear the same line again and again: "There's no inheritance tax on our place in China, so surely there's none on the one in Japan." Unfortunately, that assumption does not hold under Japanese law. When property located in Japan is inherited, the rate can reach as high as 55% — meaning more than half of what you intended to leave your children can be lost to tax.

China and Japan differ at the very foundation of how inheritance is taxed. This article sets out, as general information on the tax systems, the structural difference between the two and the three basic elements of Japan's inheritance tax.

Japan's Inheritance Tax Is an Eight-Bracket Progressive Structure

Japan's inheritance tax rises with the amount subject to tax. Article 16 of the Inheritance Tax Act sets out the following eight brackets:

Each taxable portion (after the basic deduction and apportionment by statutory share)	Rate
¥10 million or less	10%
Over ¥10m up to ¥30m	15%
Over ¥30m up to ¥50m	20%
Over ¥50m up to ¥100m	30%
Over ¥100m up to ¥200m	40%
Over ¥200m up to ¥300m	45%
Over ¥300m up to ¥600m	50%
Over ¥600m	55%

From a floor of 10% to a ceiling of 55%. That "55%" is usually the figure that first startles clients arriving from China.

But Not Everyone Pays the Top Rate — The Basic Deduction

Reading the rate table alone invites needless alarm; in practice there is a substantial buffer. Article 15 of the Inheritance Tax Act provides the "basic deduction on the estate," and the formula is simple: ¥30 million + ¥6 million × the number of statutory heirs.

For a spouse and two children — three statutory heirs — the basic deduction is ¥30m + ¥6m × 3 = ¥48 million. Up to that amount, nothing is subject to inheritance tax. Japanese inheritance tax is not levied simply because assets exist; the progressive rates above apply only to the portion exceeding this deduction.

The Spouse Receives a Major Reduction

Article 19-2 of the Inheritance Tax Act further provides a tax reduction for the surviving spouse. For property the spouse acquires through inheritance, no inheritance tax arises on the spouse's share up to ¥160 million, or up to the spouse's statutory share, whichever is greater. In a first inheritance, this measure substantially lowers the spouse's burden.

That, however, is the picture for the first inheritance only. Property the spouse acquires becomes taxable again on the spouse's own death — the "second inheritance." Maximizing the reduction at the first stage can produce a heavier burden at the second. This continuity is precisely why inheritance should be approached as a structure, not as a single-year filing.

China Is Zero — But Not "Zero Forever"

China, by contrast, has no inheritance tax at all — not an exemption, but the absence of the tax category itself. In Asia, Hong Kong abolished estate duty in 2006 and Singapore in 2008; among the jurisdictions still levying it in earnest are Japan and South Korea.

Still, "zero now" and "zero in the future" are separate questions. China has previously considered legislation in this area, and building an asset plan on the permanent absence of such a tax carries its own risk.

Treat It as a Structural Question

In our experience, most inheritance problems for Chinese families in Japan arise from applying one country's assumptions to the other without understanding either system. Three starting points to confirm:

How much property is located in Japan? Only the portion above the basic deduction is taxed.
Who are the statutory heirs, and how many? This sets the basic deduction and each person's share of the burden.
How will assets move across the first and second inheritances? This changes how the spousal reduction should be used.

Map the location of assets in both countries, the composition of heirs, and the flow across two stages of inheritance onto a single structural diagram. That is the starting point of inheritance planning for families holding assets across borders. Note, too, that inheritance rules include annual and time-bound provisions such as filing deadlines, so it is best to plan well before an inheritance arises.

This article provides general information on tax systems and does not constitute individual tax consultation. Specific filings and tax computations are handled by licensed partner tax accountants whom we introduce.

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