Japan Inheritance Tax & how long stay in Japan: A Pattern-by-Pattern Guide for Foreign Nationals

1. Why ‘Domicile’ Is the Most Important Concept in Japanese Inheritance Tax

In Japan’s inheritance tax system, where the deceased (decedent) and the heirs were living — their ‘domicile’ — determines whether Japanese inheritance tax applies to assets worldwide or only to assets located within Japan.

This difference can amount to hundreds of millions of yen. And the definition of ‘domicile’ in Japanese tax law is, to put it plainly, deliberately vague.

What This Article Covers ① Why the definition of ‘domicile’ is inherently ambiguous (the ‘center of life’ standard) ② Unlimited vs. Limited taxpayers — what the difference means in practice ③ Pattern 3: Foreign nationals with 15+ years of Japan residence ④ Pattern 4: Under 15 years, but holding a spousal/permanent visa — a hidden trap ⑤ Pattern 5: Under 15 years, holding a work/skills visa (Table 1) — limited liability ⑥ Pattern 6: Never resided in Japan (overseas real estate investors → see linked article)

2. Japan’s Definition of ‘Domicile’: Intentionally Vague

There is no statutory definition of ‘domicile’ (jusho, 住所) in Japan’s Inheritance Tax Act. The Inheritance Tax Basic Circular (1-3, 1-4 shared -5) simply states: ‘domicile means the center of each individual’s life, and whether a place is the center of life shall be determined based on objective facts.’

■ Resident Registration ≠ Tax Domicile

A common misconception: the address on your residence card or juki (resident registration) is not automatically your tax domicile. What matters is where you actually live — your ‘center of life’ — which may differ from where you are registered.

■ Factors Used to Determine Domicile

Factor	How It Is Assessed in Practice
① Residence	Does the person maintain a home in Japan (rented or owned)? How continuously have they lived there?
② Days in Japan	Number of days physically present in Japan per year. Important, but not conclusive on its own.
③ Employment & workplace	Is the person employed in Japan? Which country’s entity pays their salary?
④ Family situation	Is the spouse and/or children living in Japan? Are they in the same household?
⑤ Asset location	Where are bank accounts, real estate, and investment accounts held? Are they actively used?
⑥ Nationality	Whether the person holds Japanese nationality. Nationality alone does not determine domicile.

No single factor is conclusive. A person can spend fewer than 183 days in Japan yet still be considered a Japan domiciliary if their family lives there. Conversely, a person with Japanese resident registration may be deemed non-domiciled if their actual life is centered overseas.

■ Key Precedent: The Takefuji Case

In a landmark Supreme Court case involving an attempt to avoid Japanese gift tax through overseas relocation, the court held that ‘the existence of a tax avoidance purpose does not change the determination of domicile — only objective facts about where the center of life is located matter.’ Intent to minimize tax cannot override the reality of where you live.

3. Unlimited vs. Limited Tax Liability: The Fundamental Distinction

Unlimited taxpayer: Worldwide assets (Japan + overseas) subject to Japanese inheritance tax Limited taxpayer: Only Japan-situs assets subject to Japanese inheritance tax

Which category applies depends on a matrix of factors: the domicile, nationality, visa type, and history of residence in Japan for both the decedent and each heir. The table below shows the key patterns covered in this article.

Deceased’s Status	Heir’s Status	Scope of Taxable Assets	Pattern in This Article
Has domicile in Japan (Japanese or foreign)	Has domicile in Japan (excl. temporary residents)	Worldwide assets	Patterns 3 & 4 (partly)
Foreign national decedent (Table 1 visa, Japan domicile)	Temporary resident (Table 1 visa, ≤10 yrs in 15)	Japan-situs assets only	Pattern 5 ★ Key topic
Foreign national decedent (Table 1 visa, Japan domicile)	No domicile in Japan (foreign national)	Japan-situs assets only	Pattern 5
Non-resident decedent (no domicile in Japan)	No domicile in Japan (foreign national)	Japan-situs assets only	Pattern 6 (Overseas investors)

※ This table shows major patterns only. The actual determination depends on individual circumstances. Always consult a specialist.

4. Pattern 3: Foreign Nationals Who Have Lived in Japan for 15+ Years

A foreign national who has lived in Japan for more than 10 years out of the past 15 years does not qualify as a ‘Temporary Resident’ — regardless of visa type.

Decedent = Foreign national with 15+ years residence (Table 1 visa, Japan domicile) → If heir is also a foreign national qualifying as Temporary Resident: Japan-situs assets only taxed → If heir is a Japanese national or long-term Japan resident: Worldwide assets taxed

Many long-term foreign residents assume ‘I’m a foreigner, so Japan only taxes my Japanese assets.’ This can be wrong. If the heir is a Japanese national or has their own long-term Japan connection, worldwide assets become taxable. The combination of decedent and heir status both matter.

5. Pattern 4: Under 15 Years of Residence, But Holding a Spousal or Permanent Visa — A Hidden Trap

Many foreign nationals assume that if they have lived in Japan for less than 15 years, their overseas assets are safe from Japanese inheritance tax. This is not always true. The type of visa you hold is critical.

■ Three Requirements to Qualify as a ‘Temporary Resident’ (All Must Be Met)

You hold a residence status (visa) at the time of the inheritance
That visa is listed in Table 1 of Japan’s Immigration Control and Refugee Recognition Act (Table 2 visas do NOT qualify)
The total period you had a domicile in Japan within the past 15 years is 10 years or less

■ Table 1 vs. Table 2: The Decisive Difference

Category	Main Visa Types Included	Inheritance Tax Treatment
Immigration Act Table 1 (Work/Skills)	Highly Skilled Professional / Engineer-Specialist / Intra-Company Transferee / Research / Instructor / Business Manager, etc.	May qualify as Temporary Resident → Japan-situs assets only taxed
Immigration Act Table 2 (Status-based)	Permanent Resident / Spouse of Japanese National / Spouse of Permanent Resident / Long-Term Resident	Does NOT qualify as Temporary Resident → Worldwide assets may be taxed

Foreign nationals holding a spousal visa (Spouse of Japanese National), permanent residency, or a long-term resident visa are NOT Temporary Residents. Even if you have lived in Japan for only a few years, your worldwide assets may be subject to Japanese inheritance tax. This is the most commonly missed planning point for married expats.

Example: An American citizen who has lived in Japan for 3 years on a spousal visa passes away. Despite living in Japan for only 3 years:

The spousal visa (Table 2) means ‘Temporary Resident’ protection does not apply
U.S. bank accounts, real estate, and investment portfolios may all be subject to Japanese inheritance tax
Whether worldwide taxation actually applies depends on the heir’s status — but the risk is real and must be assessed

This area is highly fact-specific. The combination of visa type, length of residence, and heir status must all be analyzed individually.

6. Pattern 5: Under 15 Years of Residence with a Table 1 Visa (Temporary Resident — Limited Liability)

Foreign nationals working in Japan on a work or skills-based visa (Table 1) who pass away may qualify as a ‘Foreign National Decedent’ or ‘Temporary Resident,’ limiting Japanese inheritance tax to Japan-situs assets only.

■ Conditions for Limited (Japan-Only) Liability

The decedent qualifies as a ‘Foreign National Decedent’ or ‘Non-Resident Decedent’
The heir holds a Table 1 visa and has had a Japan domicile for a total of 10 years or less within the past 15 years

Result: Only Japan-located assets (real estate, bank accounts, stocks, etc.) are taxable → Assets outside Japan (home country real estate, overseas bank accounts, etc.) are NOT subject to Japanese inheritance tax

■ Why This Rule Exists

This protection was introduced to encourage highly skilled foreign nationals to work in Japan without the fear that living here could trigger Japanese inheritance tax on their entire global estate. However, critical caveats apply:

Obtaining permanent residency removes this protection — worldwide taxation may apply from that point forward
The 15-year window must be calculated carefully, including periods of intermittent residence
Whether a Japan domicile actually exists remains a separate and potentially contested question

7. Pattern 6: Never Resided in Japan (Overseas Investors with Japanese Real Estate)

Foreign nationals who have never lived in Japan but own Japanese real estate face a simpler picture: only Japan-situs assets are subject to Japanese inheritance tax. However, significant practical procedures are still required.

For a complete guide to the inheritance procedures, inheritance tax, and income tax filings (including the final income tax return for rental property) in this scenario, please see our dedicated article:

▶ Related Article: What Happens When a Foreign National Dies Owning Property in Japan? → https://probitas.jp/international-inheritance/foreignpersonownedproperty/ (Covers investment vs. residential property, final income tax return, and inheritance registration)

8. Frequently Asked Questions

Q: If I deregister from Japan’s resident registration, will I avoid Japanese inheritance tax?

A: Not automatically. Tax domicile is determined by objective facts — where your actual center of life is. If your family remains in Japan, you use Japanese bank accounts, and you return to Japan regularly, you may still be considered Japan-domiciled despite deregistering. Tax authorities look beyond the paperwork.

Q: I just received permanent residency. How does this change my inheritance tax exposure?

A: Significantly. Permanent residency (PR) is a Table 2 visa, which means you no longer qualify as a Temporary Resident. From the moment you obtain PR, your worldwide assets may become subject to Japanese inheritance tax, regardless of how long you have lived in Japan. We strongly recommend reviewing your estate planning before applying for PR.

Q: Who files the inheritance tax return and where?

A: If a heir has no Japan domicile, a Tax Representative (nozei-kanri-nin) must be appointed in Japan to file on their behalf. The filing is made at the tax office with jurisdiction over the decedent’s last Japan domicile. The deadline is 10 months from the day the heir learns of the death.

Q: If both Japan and my home country impose inheritance tax on the same assets, is there double taxation?

A: Japan has a Foreign Tax Credit (gaikoku zei-gaku koujyo) mechanism. If the same asset is also subject to inheritance tax in another country, a credit may be available against the Japanese inheritance tax. The calculation is complex and depends on the tax system of your home country (estate tax vs. inheritance tax).