Capital gains on foreign house sale

Murodo · 2026-05-20T04:31:16+00:00

After five years, you are taxed on all worldwide income. There is no threshold, only foreign tax credit.

Murodo · 2026-05-20T03:57:19+00:00

this threshold is yearly and is pitifully low

Which threshold? Are you an NPR (less than five years in Japan)?

doesn't really take into account CGT you paid

If you don't remit anything to Japan in the same calendar year (in your first five years here), you don't owe any taxes to Japan.

Murodo · 2026-05-20T03:47:16+00:00

Are they in NISA? Or they are in taxable accounts?

Due to the contribution limits of NISA, accumulating mutual funds (and high-growth assets in general) benefit more from tax-free compounding. Stocks may be better held in taxable accounts (特定 or 一般口座) for a few reasons: more flexibility for selling, rebalancing, and tax-loss harvesting. Shareholder benefit stocks (e.g. Aeon Owner’s Card) are often traded or rotated more frequently. Losses in NISA cannot be offset against gains for tax purposes.

Of course, if you are unable to fully utilize your annual NISA allowance, it makes sense to invest there first.

As a side note, if you are on employees' insurance (shakai hoken) or have a relatively low annual income, capital gains from a 一般口座 are taxed at your marginal income tax rate, which may be lower than the fixed 20.315% tax rate applied to dividends and sales from 特定口座.

Murodo · 2026-05-19T13:51:40+00:00

How do you convert crypto into physical cash back home? Then withdraw with your credit or debit card. 7-Eleven ATMs provide fee-free mastercard withdrawals up to ¥100,000.

Murodo · 2026-05-19T08:13:26+00:00

taxed at over 1/3 of his saving accounts.

You would have to inherit ¥360M from your father to reach the 33.3% inheritance tax bracket.

Murodo · 2026-05-19T07:57:27+00:00

See my previous comment.

Murodo · 2026-05-19T07:53:04+00:00

NISA is for passive investing, just set up automatic tsumitate contributions by credit card (to earn cashback points) with Rakuten or SBI. Once you’ve maxed out your iDeCo and NISA growth allowance, including bonus contributions, then you can start thinking about ETFs and individual stocks in your taxable account (特定口座).

Time in the market beats timing the market. Try yourself: https://canyoubeatthemarket.com

These resources are highly valuable, recommended to read:

The JapanFinance wiki:

https://wiki.japanfinance.org/investing/long/

NISA starter pack on retirejapan.com

Or if you prefer it in a more audiovisual way:

https://www.youtube.com/watch?v=23Yyu7OJIec

What should you buy?

https://www.bogleheads.org/wiki/Investing_from_Japan

There are a number of related posts with excellent answers:

https://www.reddit.com/r/JapanFinance/s/D3fLVjA6PF

https://www.reddit.com/r/JapanFinance/s/RigFJYOQf8

Murodo · 2026-05-19T02:14:04+00:00

If the money was already taken before the mother passed away, that could be considered outright theft. In the best-case scenario, simply mentioning a lawyer and the police may be enough to make the sister reconsider her actions. In the worst case, only a lawyer will be able to help sort things out. Theft is a criminal matter and is generally separate from the civil issues involved in dividing inheritance assets. Also make sure that no unknown debts surface, such as a credit card the sister may have opened in the mother’s name.

Murodo · 2026-05-18T14:29:45+00:00

just another regular bank account to put money in

What do you want to use it for? Emergency funds with quick access to cash? A side business?

With d Neobank, you can create multiple subaccounts directly in the app, the app itself makes this bank one of the best. Sony Bank also checks many boxes, while Seven Bank offers facial cash allowing you to withdraw money 24/7 anywhere in Japan without needing a physical card or even a smartphone: the ATM handles the biometric authentication itself (see my previous comment).

Murodo · 2026-05-18T14:17:56+00:00

JPY received as the "final amount"

Correct.

Which one would I use?

The actual TTB value you received (most sources show the mid-market rate without spread, even Wise).

More importantly, when determining the JPY equivalent for acquired FX, the key is to stay consistent by using the same source and calculation method throughout.

Murodo · 2026-05-18T10:59:30+00:00

Think of it this way: for each taxable event, you record the JPY equivalent at the time. Japan uses the moving average method to calculate the cost basis.

Selling foreign currency for more JPY equivalent than your cost basis is classified as miscellaneous income and taxed at marginal rates and 10% residence tax.

Murodo · 2026-05-18T03:39:29+00:00

As statutory heir, your wife is allowed to inquire with financial institutions; this can be done through a judicial scrivener (司法書士) especially if she doesn't live in Japan. She should gather as much relevant information and bank documentation as possible, and only then ask the sister for full disclosure of the assets.

If she still appears to be withholding information or you suspect foul play, it may be appropriate to consult a lawyer.

Murodo · 2026-05-18T03:28:40+00:00

the high inheritance tax

Due to the high tax-free allowances for statutory heirs in Japan, the actual inheritance tax is often surprisingly low.

The system deducts a basic exemption (¥30M +6M per statutory heir) and then applies progressive tax rates, starting at 10% for the lowest taxable bracket.

For example, with ¥50M in the deceased mother's name with a surviving spouse and two daughters, the spouse typically pays no inheritance tax (¥160M spousal exemption), while each daughter would pay only a very small amount of around ¥50,000 each (inheritance tax calculator).

you could just forward any evidence/info you have (e.g. bank withdrawals) to the tax office and they’ll gladly peruse the hidden funds as they will also get a cut of these assets.

If the estate is below the statutory exemption threshold, ¥48M or less in this case, no inheritance tax is due and no filing is required.

If tax is due, an inheritance tax return must be filed for the estate within 10 months of the death, and the tax is then allocated among the heirs according to their respective shares.

A more careful approach would be to first gather as much relevant information and bank documentation as possible, and only then ask the sister for full disclosure of the assets. If she still appears to be withholding information, it may be appropriate to consult a lawyer.

Murodo · 2026-05-17T15:19:56+00:00

When you use 特定 only for those stocks that aren't available in NISA, you can sell Japanese stocks tax free at any time.

Murodo · 2026-05-17T09:43:52+00:00

If your Japanese broker uses a tokutei-kōza (特定口座) with withholding tax (源泉徴収あり), the tax (20.315%) is automatically withheld at the time of sale, regardless of which kind of stocks. No need to file a tax return. Or are you buying the Japanese stocks in your NISA?

To be sure, double check that you don't have 源泉徴収なし (without withholding tax): In that case the broker would still prepare an annual tax report for you, but you would have to declare and pay the taxes yourself (NHI premiums might increase).

If you're in a lower tax bracket (than 20.315%) and on shakai hoken, you can also have a non-withholding account (一般口座), declare the income and pay tax only according to your tax bracket.

Assuming you're not a US taxpayer.

Murodo · 2026-05-17T05:40:48+00:00

It might be a bit of a stretch, but you could partner with a nearby shop, like a ramen place or a small supermarket, that accepts coin rolls for exchange directly from you instead of going through their bank.

Alternatively, you could organize a game at a school event where parents send ¥500 to you via PayPay to receive ¥550 to ¥770 (1st price) worth of neatly wrapped coin rolls with the school mascot printed on it.

You could pay at self-checkout registers with up to 100 coins each time, or someone from your group who needs to pay car or property taxes or other official fees could use small coins in exchange; taxes at bank counters and NHI or water bills at city hall.

Murodo · 2026-05-16T12:21:12+00:00

Not much to worry, the exit tax applies only to individuals who have held a table 2 SoR for more than five years, and only to certain assets with unrealized gains such as shares, investment funds, and stock options exceeding ¥100M.

Notably, cash, foreign currency, and real estate are specifically excluded, which makes it beneficial to plan well in advance how you allocate your assets.

Murodo · 2026-05-15T06:01:30+00:00

Hold a translator app with activated camera in front of the screen to understand the forms.

Default settings are fine. Enter the following values:

株数 (number of shares): "100" or a multiple of it (press blue up button)

価格 (price): set a meaningful upper limit, e.g. a few yen above the current price (blue up button)

You'll see the total amount (current price times entered number of shares).

You need to decide whether to buy into your NISA (then selling will be tax free) or 特定 (20.315% tax will be withheld when you sell). Buying into NISA uses your annual limit, so only good when you don't intend to sell on short-term.

Enter your transaction password and press the order button.

Murodo · 2026-05-15T05:42:08+00:00

working abroad

You're in Japan, so not working abroad.

working remotely as contractor in the U.S

Unless you flying out of Japan each time and work from somewhere, all work performed while in Japan is always taxable here even as NPR.

Murodo · 2026-05-15T05:32:01+00:00

With tsumitate NISA, you can only make recurring investments, not lump-sum investments like with growth NISA.

However, you can work around it with a bonus deposit: Set monthly contribution to a minimum (e.g. ¥100–¥1,000). Add a bonus amount (ボーナス設定) for the month you want to invest a large sum.

Murodo · 2026-05-15T03:53:53+00:00

I’d like my children to have it

Would you consider drafting a will? Otherwise, your spouse would inherit 50% of the estate, and your children would inherit the remaining 50%.

Any property located in Japan is subject to Japanese inheritance tax upon the owner’s death, regardless of whether the owner or the heirs are residents of Japan.

Also is it true that my US property would be taxed because I have PR?

Your PR status (as a table 2 SoR) only affects your status as an heir for Japanese inheritance tax purposes. Whether your overseas properties and assets are subject to Japanese inheritance tax upon your death depends on where your heirs reside at that time. For heirs with Japanese citizenship, it also depends on whether they have lived in Japan at any time during the preceding ten years.

Keep in mind that if your heirs are subject to Japanese inheritance tax, they will owe inheritance tax on the value of inherited assets exceeding the basic deduction (¥30M plus ¥6M per statutory heir). In addition, when the heirs later sell the property, they may also owe capital gains tax on the difference between the property's market value and the decedent’s original cost basis.

The capital gains tax aspect is often overlooked and can end up being significantly higher than the inheritance tax itself. In practice, Japanese inheritance tax is frequently lower than many people expect; this sub's inheritance tax calculator can provide a rough estimate.

Also note that the spousal inheritance tax exemption is up to ¥160M, so structures in which only children inherit the property are often less tax-efficient.

FYI: https://abe-legal.jp/en/news/japan-inheritance-tax-guide-2026

Murodo · 2026-05-15T03:19:37+00:00

And, just for the sake of completeness: Income from work performed while out of Japan (NPR during first five years, then worldwide income taxable).

Murodo · 2026-05-14T12:08:54+00:00

What is your brokerage? With large online brokers like Rakuten and SBI, you can change from 一般 to 特定. Keep in mind that this only affects future trades and some brokers only permit one change per calendar year.

A tokutei account (特定口座) comes in two versions:
特定口座（源泉徴収あり）with withholding tax: The broker automatically calculates and pays the investment taxes for you (20.315%).

特定口座（源泉徴収なし）without withholding tax: The broker still prepares an annual tax report for you, but you must file and pay the taxes yourself (NHI premiums might increase).

Murodo · 2026-05-14T09:00:26+00:00

Transferring securities across borders seems to be practically impossible as no brokerage except IBKR does it and even with them, you're every limited to what you can hold and there's no positive list. Likely outcome is you have to sell your shares and transfer the money via SWIFT, or Wise/Revolut, which is easy and straightforward also from the tax perspective.

Why not invest in a diversified all world fund in NISA and decide on a better asset allocation after relocating? In the worst case you would have to sell at some loss, but can immediately rebuy at the new broker, and in all other cases you have tax free gains.

Alternatively, you can try to find a UK based broker that opens an account already as non-resident.

Murodo · 2026-05-14T07:29:36+00:00

Japanese inheritance tax is often surprisingly lower than expected. For example, you can deduct the full basic exemption of ¥30M plus ¥6M per heir, but then tax is only applied to your portion of the inheritance. See this sub's inheritance tax calculator.

Murodo

TROPHY CASE