Japanese inheritance tax applies when the taxable value of an estate is more than the basic exemption of ¥30 million plus ¥6 million for each statutory heir. A family with three heirs, for example, pays nothing on the first ¥48 million. If the estate is above that line, the heirs must file a return and pay the tax within ten months of learning of the death. Only about one estate in ten is taxed, but planning early matters because the largest reliefs depend on filing on time and agreeing how the estate is divided.
How the basic exemption works
The exemption grows with the number of statutory heirs. If the estate is under the exemption, no return is required.
| Statutory heirs | Basic exemption |
|---|---|
| 1 | ¥36 million |
| 2 | ¥42 million |
| 3 | ¥48 million |
| 4 | ¥54 million |
Land, buildings, shares, bank deposits, and certain life insurance and retirement payments all count toward the estate. Debts and funeral costs are deducted.
How many estates are taxed
According to the National Tax Agency, 1,605,378 people died in Japan in 2024, and returns were filed for 166,730 of them. That is a taxable ratio of 10.4%. For those estates, the average taxable value was about ¥140 million, and the average tax was about ¥19.5 million per estate. Owning a home in a city, plus savings and a pension payout, can bring an ordinary family close to the line.
Inheritance tax rates
Tax is calculated by dividing the taxable estate among the statutory heirs in their legal shares, applying the rates below to each share, and then splitting the total among the people who actually inherit.
| Taxable amount per legal share | Rate | Deduction |
|---|---|---|
| Up to ¥10 million | 10% | — |
| Up to ¥30 million | 15% | ¥0.5 million |
| Up to ¥50 million | 20% | ¥2 million |
| Up to ¥100 million | 30% | ¥7 million |
| Up to ¥200 million | 40% | ¥17 million |
| Up to ¥300 million | 45% | ¥27 million |
| Up to ¥600 million | 50% | ¥42 million |
| Over ¥600 million | 55% | ¥72 million |
The reliefs that make the biggest difference
- Spouse tax reduction. A surviving spouse pays no inheritance tax on what they receive up to ¥160 million, or up to their legal share if that is larger. The reduction only applies if a return is filed, even when no tax ends up being due.
- Small-scale residential land. The value of the family home’s land can be reduced by 80% for up to 330 m² when it passes to a qualifying heir. Business land qualifies for 80% on up to 400 m², and rental land for 50% on up to 200 m². This also requires a filed return.
- Life insurance exemption. Death benefits received by heirs are exempt up to ¥5 million multiplied by the number of statutory heirs.
Why the ten-month deadline matters
Ten months passes quickly while a family is also handling registrations, bank accounts and real estate. Property that has not been divided among the heirs by the filing deadline generally cannot receive the spouse reduction. Heirs can still claim it later by attaching a plan to divide the estate within three years and then filing a claim for correction within four months of the division, but that means paying first and recovering tax afterwards.
How gifts interact with inheritance tax
- Each recipient can receive up to ¥1.1 million a year in gifts without gift tax.
- Gifts made shortly before death are added back to the estate. For gifts made from January 2024, this look-back period is being extended from three years to seven.
- Under the settlement-at-inheritance system, parents or grandparents aged 60 or older can give to children or grandchildren aged 18 or older with a lifetime special deduction of up to ¥25 million. Gifts above the deduction are taxed at a flat 20%, and the tax paid is credited against inheritance tax later.
Steps to take now
- List the main assets: property, deposits, securities and insurance policies.
- Count the statutory heirs and estimate the basic exemption.
- Check which properties might qualify for the small-scale residential land relief.
- Decide whether lifetime gifts make sense under the new seven-year rule.
- Prepare a will so the estate can be divided within the deadline.
Our team helps families estimate their exposure and plan ahead. Learn more about our inheritance tax services or contact us to talk through your situation.