The Japanese Government’s Select Committee on the Taxation System (seifu-zeiseichosakai) announced a new policy to reduce the fixed inheritance deduction from 50,000,000 JPY+10,000,000 JPY per inheritor to 30,000,000 JPY+6,000,000 JPY per inheritor. The announcement was made at a general assembly meeting on December 13th.
At the same time the maximum tax rate will be increased from 50% to 55%. Under the current scheme, if an individual inherits over 300,000,000 JPY in assets, the tax rate is 50%. The new tax rate of 55% will apply to inheritances over 600,000,000 JPY. The current 6 tax brackets will increase to 8.
The strengthening of the inheritance tax is to reduce disparities and to encourage income redistribution.
There was also debate over the revision of the fixed asset tax deduction for new properties. The current scheme has been extended until the end of 2011 and is due for reconsideration in the next year.
This would be the first inheritance tax increase since 1958.
Source: The Asahi Shimbun, December 13, 2010.