A guide to determining whether you need to file an inheritance tax return.

Many people are unsure whether they need to file an inheritance tax return when an inheritance occurs. Especially if you own a significant amount of assets or real estate, failing to correctly determine whether or not to file can lead to problems later. This guide clearly explains the necessity of filing an inheritance tax return and supports you in proceeding with the process with peace of mind.

Criteria for requiring inheritance tax filing

Whether or not you need to file an inheritance tax return depends on the total value of the inherited assets. Specifically, please check the following points.

• Calculation of basic deduction amount

The basic exemption amount is calculated as "30 million yen + (6 million yen × number of legal heirs)".

For example, if there are three legal heirs, the basic exemption amount is 30 million yen + (6 million yen x 3) = 48 million yen.

• Appraisal value of inherited property

We value all assets, including not only cash, but also real estate, stocks, and savings. Real estate valuations are calculated based on official land price assessments and fixed asset tax assessments.

• Whether it exceeds the basic deduction amount

If the total value of the inherited assets exceeds the basic exemption amount, an inheritance tax return is required. If it does not exceed this amount, a return is not required.

Points to note depending on the type of asset

Inherited assets come in various forms, but real estate, in particular, requires careful valuation due to its complexity.

• Real estate valuation methods

The land valuation method and the multiplier method are used. The land valuation method is announced annually by the National Tax Agency and is the basis for determining the assessed value of land. For buildings, the assessed value for fixed asset tax purposes is used as the basis.

• Jointly owned real estate

Real estate held in joint ownership is valued according to each owner's share. If there are multiple co-owners, please add up each owner's share and calculate the value.

• Deduction of loans and debts

Debts such as loans and unpaid taxes can be deducted from inherited assets. This can reduce the amount subject to taxation.

The process for filing a tax return if necessary

If you determine that you need to file a tax return, follow these steps:

1. Investigation and valuation of inherited property

   We calculate the appraised value for each type of asset. It's best to consult a specialist when it comes to real estate appraisals.

   
   

2. Preparation of tax return

   Obtain the tax return form from the tax office's website and fill in the required information.

   
   

3. Confirmation of the filing deadline

   You must file your tax return and pay your taxes within 10 months of the day following the day you learned of the commencement of the inheritance.

   
   

4. Filing with the tax office and paying taxes.

   You will need to file your tax return and pay your taxes. There are also options for installment payments and deferred payments, so please consult with us if you have any concerns about your finances.

   
   

Things to be aware of even if reporting is not required

Even if your income is below the basic exemption and you don't need to file a tax return, please note the following points.

• Inheritance registration must be performed.

The transfer of ownership of real estate is done through inheritance registration. Regardless of whether or not you file a tax return, it's best to proceed with the procedure as soon as possible.

• Preparing for future inheritance

Even if you don't need to file a tax return this time, your assets may increase through future inheritance. It's important to understand how to manage and value your assets.

• Consult with an expert

Inheritance tax is complex, so consulting with a tax accountant or judicial scrivener can help prevent mistakes.

Whether or not you need to file an inheritance tax return depends on the type and value of your assets, as well as the number of legal heirs. Making an accurate decision tailored to your specific situation is the first step towards a smooth inheritance process. Start by organizing an overview of your assets, and seek professional help as needed. Doing so will reduce anxieties related to inheritance and allow you to move smoothly to the next stage.