A basic deduction of 1,100,000 yen a year is added to the taxation system for settlement at the time of inheritance (for gifts made from 1 January 2024)
Source material is a Japanese government announcement (in Japanese); this page is a summary.
For gifts made on or after 1 January 2024, a recipient who has chosen the taxation system for settlement at the time of inheritance can deduct a basic deduction of 1,100,000 yen a year from the taxable value for gift tax purposes, separately from the basic deduction under calendar-year taxation (曆年課稅).
Key facts
| Start date | Property received as a gift on or after 1 January 2024 (令和6年1月1日) under the taxation system for settlement at the time of inheritance |
|---|---|
| Basic deduction | 1,100,000 yen a year (separate from the 1,100,000 yen basic deduction under calendar-year taxation) |
| Requirements for the donor | A parent or grandparent, or similar person, aged 60 or over as of 1 January of the year of the gift |
| Requirements for the recipient | Aged 18 or over as of 1 January of the year the gift is received, and a presumed heir who is a direct descendant of the donor (child, grandchild and so on) or a grandchild |
| Special deduction | Cumulative limit of 25,000,000 yen (separate from the basic deduction) |
| Tax rate | A flat 20% on the amount above the special deduction |
| Adding gifts back to the estate | For gifts made on or after 1 January 2024, the amount left after subtracting the basic deduction from the total value at the time of the gifts is added to the estate (the basic deduction is not added back) |
| How to choose the system | Submit a 'notification of choice of taxation for settlement at the time of inheritance' with the supporting documents to the competent district director of the tax office between 1 February and 15 March of the year after the first gift |
Last checked:
For property received as a gift on or after 1 January 2024 (令和6年1月1日), a recipient who has chosen the taxation system for settlement at the time of inheritance (相続時精算課税) can deduct a basic deduction of 1,100,000 yen a year from the taxable value for gift tax purposes (separate from the basic deduction under calendar-year taxation). This basic deduction also applies when the gift is added back to the estate at the time of inheritance: for each year in which gifts were received, only the amount left after subtracting the basic deduction from the total value at the time of the gifts is added to the estate. The taxation system for settlement at the time of inheritance can be chosen where a parent, grandparent or similar person aged 60 or over as of 1 January of the year of the gift makes a gift to a presumed heir who is a direct descendant (child, grandchild and so on) or to a grandchild, aged 18 or over as of 1 January of the year the gift is received. It also comes with a separate cumulative special deduction of 25,000,000 yen and a flat 20% tax rate on the amount above it.
Summaries below are factual notes based on government announcements and primary sources — not evaluations or opinions.
Summaries reflect national-level programs. Municipal (city/ward/town) programs may differ — confirm with the official desk before applying.
FAQ
From when does the 1,100,000 yen basic deduction under the taxation system for settlement at the time of inheritance apply?
It applies to property received as a gift on or after 1 January 2024 (令和6年1月1日) under the taxation system for settlement at the time of inheritance.
Is this 1,100,000 yen basic deduction also reflected in the inheritance tax calculation?
Yes. For gifts made on or after 1 January 2024, the amount left after subtracting the basic deduction from the total value at the time of the gifts, calculated for each year in which gifts were received, is added to the estate (the basic deduction is left out of the amount added back).
How do I choose the taxation system for settlement at the time of inheritance?
Submit a 'notification of choice of taxation for settlement at the time of inheritance', together with documents such as a copy of your family register, to the competent district director of the tax office between 1 February and 15 March of the year after you first receive a gift. If the property acquired from the specified donor exceeds 1,100,000 yen and you file a gift tax return, attach the notification to the return.