SEISEI SERVICES — SUCCESSION
Succession & Inheritance Structuring
Business succession is not a single act of handing over shares. Who takes over the management, who receives the property, and what happens when those two are not the same person — a plan begins only once those are settled. Left unsettled, the options disappear one by one as time passes.
This is for you if
- The valuation of your company’s shares keeps rising and you are uneasy about succession occurring as things stand
- A successor has been chosen, but how the shares, the voting rights and the personal guarantees move has not
- No successor has been chosen, or there are several children involved in the business to differing degrees
- Most of the estate consists of company shares and real estate, with no clear source of cash for the tax
- You are considering the special business-succession tax regime but cannot judge its conditions and its irreversibility
When this is not the right service
If a succession has already occurred and the task is the return and the division of the estate, you are better served by a tax firm and a lawyer who specialise in that work. Our role is to design the structure before succession happens. We do not prepare or submit returns, and we do not act as representatives in the division of an estate.
What the design addresses
Share valuation, and how shares move
What the present valuation is and which factors move it. Not lowering the valuation as an end in itself, but deciding the timing and the mechanism of transfer from the structure.
Separating management from ownership
How to design for the case where the person who runs the business and the person who receives the property are not the same, and whether to separate voting rights from economic interest.
Liquidity for the tax
What the inheritance tax will be paid with. Shares cannot be sold and property cannot be liquidated quickly. Routes such as insurance, dividends and share buy-backs need to be secured in advance.
Statutory reserved portions
Concentrating value in the successor collides with the reserved portions of the other heirs. The points of collision are identified first, including civil-law special measures and agreements made during life.
Personal guarantees and collateral
How the guarantees and collateral given personally by the owner are taken over, or released. Handing over the shares alone does not complete a succession.
Whether to use the succession tax regime
Deferral is powerful, but the obligation to keep satisfying its conditions persists for years. It should be compared side by side with a design that does not use it.
Timing changes the outcome
Most succession mechanisms can only be executed within a structurally limited window: while the share price is low, immediately after a successor is confirmed, at the turn of a fiscal year, at a given point in the accumulation of lifetime gifts. None of these can be chosen again in hindsight. Once succession occurs, almost no design margin remains. That is why the diagnostic comes early — to see the whole while options still exist.
Who does what
Succession is where several licensed professions intersect. Design and execution are separate.
| Who | What they do | When it matters |
|---|---|---|
| SEISEI | Design of the succession structure, comparison of options, sequencing, coordination of the professionals | Before succession occurs |
| Partner tax accountant | Share valuation, tax computation, filings and deferral procedures | Execution after the design is fixed, and at succession |
| Lawyer | Wills, family trust agreements, procedures concerning reserved portions | Where legal effect or a dispute is involved |
| Judicial scrivener | Registration of title to shares and property | At execution |
We neither prepare returns nor act as legal representatives. What we do is design the whole so that the tax, legal and registration specialists work to one plan, and manage the order in which they act.
How we work
1. Diagnosis
We set out concretely what would happen if succession occurred today, from the composition of the estate, its valuation and the relationships among heirs.
2. Architecture
Several succession scenarios are compared on four faces: tax burden, where voting rights land, liquidity for the tax, and the potential for conflict within the family.
3. Implementation
Executed with tax accountants, lawyers and judicial scriveners, in the order decided.
4. Stewardship
Share prices, families and tax law all move. A plan is not something written once.
Frequently asked questions
Is a lifetime gift better than inheritance?
The question as posed is usually the wrong one. The outcome turns on the choice between the settlement-at-inheritance system and annual gift taxation, the look-back period, the attributes of the recipient, and how the share price moves after the gift. It is not a matter of which is cheaper, but of how much is moved, in what order.
Should I use the business-succession tax deferral?
Where the conditions are met the effect is substantial. But the conditions must continue to be met over a long period, and the consequences of falling out of the regime partway must be weighed. It is a decision to be made after comparing a design that uses it with one that does not.
Can I consult you before a successor has been decided?
Yes — and that stage is where the design margin is widest. Some mechanisms are no longer available once a successor has been fixed.
Does a family trust reduce inheritance tax?
A trust is a vehicle for designing how property is managed and in what order it passes; it is not in itself a mechanism for reducing tax. It is effective for preparing against loss of capacity and for directing where property goes after a second succession, but formed without a defined purpose it leaves only an administrative burden.
Related insights
- The Succession Gap and the Special Business-Succession Tax Regime
- When a Family Runs a Company, How Does the Estate Change?
- Lifetime Gift or Inheritance After Death
- Japanese Inheritance Tax, Step One
- The Small-Scale Land Special Rule
Get in touch
We begin by understanding the composition of the estate and the situation of the family. Write to 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).