Provisions that allow for reduction of inheritance tax by filing a return

Inheritance is something we only encounter a few times in our lives.

Many people are unsure of whether or not they should file an inheritance tax return.

The tax-free limit for inheritance tax is

30 million yen + 6 million yen x number of legal heirs

For example, if a husband dies and the legal heirs are the wife and child,

30 million yen + 6 million yen x 2 people = 42 million yen

In addition to this tax-free limit, there are provisions that allow you to reduce the amount of inheritance tax you pay, provided you file a tax return.

Spouse tax reduction

If the spouse of the deceased person inherits the statutory inheritance share or assets up to 160 million yen, the spouse will not be subject to inheritance tax.

In the example above (where the only heirs are the spouse and children), the statutory inheritance share is 1/2.

This provision is enacted with the aim of ensuring a living for the surviving spouse.

Special provisions for valuation reduction of small residential land

If you inherit land that is being used for business purposes, leased business purposes, or residential purposes by the deceased or an heir sharing the same household, you can reduce the land’s valuation by 50% or 80%, up to a certain area.

As the valuation is reduced, your inheritance tax will also be reduced.

This is also intended to ensure the livelihood of the surviving heirs.

Special provisions for property valuation in the event of a specific disaster

If you have suffered severe damage from heavy rain or an earthquake and that disaster is designated as a specific emergency disaster, you can calculate the valuation of certain land and stocks among your inherited assets at the amount immediately after the disaster.

The condition is that the inheritance occurs before the disaster and the disaster occurs between the start of the inheritance and the deadline for filing.

Inheritance tax is assessed at market value of assets at the time of inheritance, and the declaration must be made within 10 months of the start of the inheritance.

When you actually declare your inheritance tax, the valuation of the damaged assets will have dropped significantly.

If you calculate at the valuation amount before the disaster, it will be harsh on the heirs.
(Because the inherited assets are used to raise funds to pay the inheritance tax)

Therefore, by calculating at the valuation amount immediately after the disaster, the heirs’ tax-paying ability is taken into account.

In the end

I have introduced the regulations that allow you to reduce the amount of inheritance tax by filing an inheritance tax return.

In all cases, you are required to file by the filing deadline, so I recommend that you start the filing procedure as early as possible.

-----------------------------------------------------------
都築太郎税理士事務所/Tsuzuki Taro Tax Accountant Office

ホームページ（Home）　
プロフィール（Profile）
ブログ（Blog）
個人の方（料金表）（Individual-fee）
法人の方（料金表）（Corporate-fee）
お問い合わせ（Contact）