SEISEI INSIGHTS — Succession

One Estate, Two Legal Systems, Several Taxes: Treating a Japan–China Inheritance as a Structural Problem

2026-06-16

"My parent passed away in Japan. There is property here and property in China. Where do I even begin?" We hear this from Chinese wealth holders in Japan again and again. The moment a single estate spans two countries, the applicable law, the required procedures, and the taxes due all multiply at once. A misstep at any stage either inflates the tax burden or stalls a property transfer. The right starting point is not a clever deduction — it is drawing the whole picture on a single sheet.

First: Who Inherits, and How Much — the Governing Law

The first thing to settle is which country's law determines the heirs and their shares. Article 36 of Japan's Act on General Rules for Application of Laws provides that succession is governed by the national law of the decedent. If the decedent was a Chinese national, the scope of heirs and each share is, in principle, determined under Chinese law (the PRC Civil Code) — not automatically under Japanese civil law simply because assets sit in Japan. Get this backwards and every subsequent step rests on shaky ground.

Second: The Inheritance Tax Filing on Japanese Assets

Assets within Japan require an inheritance tax filing. Article 27 of the Inheritance Tax Act requires the return to be filed with the tax office within ten months from the day following the day on which one becomes aware that the succession has commenced. Ten months is not generous once you account for document gathering, asset valuation, and reaching a division agreement. Note that this is not a loose "sometime this year" window but a firm deadline anchored to the start of the succession.

Third: The Transfer Procedures on Chinese Assets

In practice, the Chinese side is the most time-consuming. A death certificate issued in Japan must be translated into Chinese, notarized, and then consularized; that full set of documents supports a succession notarization at a local Chinese notary office, after which the real-estate registry transfer proceeds. Chinese notarial practice is strict about the formal requirements of Japanese-issued documents, and anything out of form is sent back. Document preparation alone routinely takes several months.

Overlapping Taxes — the Whole Picture in One Table

A cross-border Japan–China succession brings several taxes of differing character into view at once.

Tax	Levying side	Structural point
Japanese inheritance tax	Japan	May reach the decedent's worldwide assets (including real estate located in China)
China-side property-transfer taxes (deed tax, etc.)	China	Local taxes arising on the change of title
A future inheritance tax (China)	China	None exists at present, though the policy debate continues

The structurally critical issue here is double-taxation relief. Income tax treaties are, as the name implies, built mainly to relieve the double taxation of income — they do not directly cover inheritance or gift tax. Japan does provide a mechanism to credit a tax equivalent to inheritance tax imposed on overseas assets under local law (Inheritance Tax Act, Art. 20-2). Yet where no inheritance tax exists in China, the very premise for using that credit is absent. In short, a "pay now, recover later" mindset alone cannot cover a Japan–China succession.

Treat It as a Structural Question

In our experience, most obstacles arise not from concealment but from not seeing which country's procedure, handled by whom, comes when. Three things to confirm:

What is the decedent's national law? It sets the test for heirs and shares.
How are the assets distributed across Japan and China? This fixes the order of filing and registration.
Is there a schedule worked backwards from the Japanese filing deadline (ten months from the day after awareness of the succession)?

The Japanese inheritance tax filing is handled by a tax accountant; the Chinese succession notarization, by a local notary office. Mapping the translation, authentication, and the interface between the two legal systems onto a single structural diagram — before the succession process begins — is where a cross-border Japan–China inheritance truly starts.

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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