Investments structured as life insurance products help minimize damage when you leave Japan, and indeed while you are here, as they can be reported but aren’t taxable unless you take money out at a profit (this means all unrealized capital gains are shielded from taxes). The new Japan exit tax is applied to financial assets valued JPY100m and more, and a life insurance product currently doesn’t fall into the financial asset category. The exit tax will apply to foreigners from 2020.
Also, the obligation to report overseas assets if their aggregate value was JPY50m or more by the calendar year-end is already in force for all Japan tax residents. With legislation like FATCA and the OECD’s Common Reporting Standard (CRS) in place, more and more of our financial data gets automatically exchanged, so the authorities in Japan, who joined the CRS in September 2018, will become aware of assets held wherever they are held if they aren’t aware already. So again if they are held in an insurance wrapper they can be easily reported but aren’t taxable unless you take a profit out (this means all capital gains are shielded from taxes). At which point one can plan to take things out when one is in the best tax friendly jurisdiction possible to mitigate as much tax or all if possible.
If you are interested in taking a closer look at life insurance products, their benefits, cost, etc., do let me know and we will send you information.
03 5724 5100 info@bannerjapan.com
