From this week, beneath the glitter of tinsel and glimmer of outdoor seasonal illumination, the bonenkai (year-end party) season begins in earnest.
Amidst these distractions, however, one comes away with the impression that the magazines are devoting more pages to health advisories for staying alive — or the financial implications of dying — with less space being devoted to schadenfreude over lapses among the luminaries, such as Nissan’s ousted chairman, Carlos Ghosn.
The simplest explanation for this, of course, is that magazines know they must appeal to an aging readership, and feel moved to provide material to aid readers in their shukatsu, a term best rendered in English as “putting one’s affairs in order.”
Coincidentally, just as I began writing this contribution I received an email from a Japanese friend of many years who had studied abroad and is quite fluent in English. He apologized for having been out of touch, writing, “The inheritance tax has kept me pretty busy as it involves consulting with banks, legal people, real-estate people, etc., to minimize the tax. This is really a pain in the ass.”
It seems that, effective from the start of 2019, a major revision in Japan’s inheritance tax system, the first in 40 years, will go into effect. The changes will touch upon the rights of heirs, distribution of property, freezing of bank accounts, and the management of last wills and testaments, among others.
Shukan Bunshun (Nov. 22) produced a to-do list of 30 items before going to a public notary to draw up one’s will. Nos. 1 through 15 involve organizing financial data, including bank accounts, deeds, securities and credit card numbers; considering monetary gifts of ¥ 1.1 million per year to one’s children and grandchildren, which are not taxed; and factoring in outlays for ancestral graves — rather than allowing those costs to be passed on to one’s heirs. Along with putting aside contingency funds for funeral-related expenses, an account should be set up for the automatic payment of electricity, gas, water, telephone and so on. Even if a husband’s bank account is frozen upon death, the tax office will allow a widow to withdraw a reasonable amount of up to ¥1 million to cover those necessities.
Shukan Bunshun quotes a Tokyo-based tax accountant named Kenkichiro Murata as saying that attorneys should best be avoided.
“There are lots of deductions and special provisions for the inheritance tax, and the fact is, some accountants are more knowledgeable than others,” he says. “A top-notch accountant may charge you a few hundred thousand yen more, but if he reduces your taxes by several million yen, it’ll be worth it.”
Shukan Asahi (Dec. 7) ran a six-page list of “arrangements after death,” describing the issue to readers as a hozon-ban (to be retained for future reference).
“One doesn’t want to think about ‘ending notes,’ but at some time you will encounter the death of a person close to you,” the article begins. “With almost no time for feelings of sadness, you will be hassled to fulfill arrangements, one after the next. Unable to make decisions in a composed manner, it’s possible you’ll feel regret for the way things turned out. So pay attention to these necessary arrangements.”
Among the most expensive of these arrangements will be funerals. Based on 1,999 responses to a nationwide survey, the average outlay for all related expenditures came to ¥1,762,516.
On another note, concealing money abroad is about to become more difficult. Starting from 2019, the National Tax Agency is expected to close one more loophole: overseas bank accounts held by Japanese nationals and Japan residents. Shukan Shincho (Nov. 22) reported that, through the Common Reporting Standard (CRS) shared by OECD members, the tax agency has become aware of some 550,000 overseas accounts in 64 countries and territories, including nearby Asian tax shelters such as Hong Kong and Singapore. The system will make it considerably more difficult to hide deposits in secret foreign accounts.
A topic we’ll be certain to see more of in the months ahead will relate to stretching one’s pension in order to cope with the increases in living costs anticipated after the consumption tax is boosted from 8 percent to 10 percent, which is expected to take effect from October.
Moves are also underway to extend the age at which a worker can start receiving pension payouts to 70 or later.
Noting that since the current average of so-called health longevity — the age up to which one enjoys robust health — is 72.14 years for Japanese males, Shukan Gendai (Oct. 13-20) predicted that should people be obliged to work up to age 70, the very notion of rogo (one’s dotage) will effectively disappear.
“Our generation is being told that to be free of financial pressures after retirement, we will need to have approximately ¥80 million in assets,” a 58-year-old man employed in the construction industry says. “That figure was based on retiring at age 60, with monthly living costs of ¥300,000 and enough left to cover home renovations and so on.
“But if people’s life spans are extended to the age of 100, projected costs come to double that figure. As long as social pension payouts are not reduced my age group should be all right, but it’s going to be very rough on my children’s generation, who will have to work until 70 but with no assurances that the expected pension will materialize.”
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