How Japan Inheritance Tax Is Calculated: Deductions, Rates, Spouse Relief

This article is part of the Zagdim wiki series on Japanese property, in the section on inheritance and gift tax. It answers one question: how is Japan inheritance tax calculated? Who has to pay, which assets Japan taxes, and which deadlines and formalities apply are covered in the main article, “Overseas Families May Owe Japanese Inheritance Tax: Rules for Non-Residents Who Inherit or Receive Japanese Property”.

Japan inheritance tax is not a tax rate multiplied by the property you receive. Japan’s inheritance tax is called sozoku-zei (相続税). The calculation starts with the net estate and subtracts the basic deduction (基礎控除額), which is JPY 30 million plus JPY 6 million multiplied by the number of statutory heirs. The remainder is treated as if each statutory heir received a share equal to their statutory share, and each notional share is taxed under a progressive scale of eight bands from 10% to 55%. The results are added up to give the total inheritance tax for the whole family, and that total is then split according to the proportion each person actually receives. Finally, reliefs are subtracted. The portion a spouse actually receives, up to the greater of JPY 160 million or the spouse’s statutory share, is not taxed, but the spouse must file a return to claim it.

The sections below follow the order of the calculation.

Why Japan’s Inheritance Tax Works Differently From What You Might Expect

For families who own property in Japan while their relatives live elsewhere in Asia or overseas, the Japanese method differs from intuition in three ways.

• The rates are not applied to the whole estate, or to the part you actually receive. Some countries apply a progressive scale to the entire taxable net estate (subject to each jurisdiction’s current rules). Japan first assumes the estate is divided among the statutory heirs according to their statutory shares, and then applies the rates to each share separately.
• The family’s total tax depends on the number of statutory heirs, not on how the estate is actually divided. The actual division only affects how much of the total each person bears and how much of the spouse’s relief can be used.
• A tax of zero after relief does not mean no return is needed. A return must still be filed if the spouse’s tax reduction brings the tax to zero, or if the land special rule is what brings the estate below the basic deduction.

Step 1: Which Assets Count Toward the Net Estate?

The net estate is the taxable estate, plus property received under the settlement-at-inheritance taxation system (相続時精算課税), minus non-taxable assets, deductible debts and funeral expenses, plus any lifetime gifts that must be added back. Japanese property is not valued at its purchase price or market price. It is valued using the road-rate value (路線価), the fixed asset tax assessed value (固定資産税評価額) and similar measures. An heir who is taxed only on Japanese assets is called a limited taxpayer (制限納税義務者); such an heir can deduct a narrower range of debts and cannot deduct funeral expenses. Both points are explained in the main article.

How Are Lifetime Gifts Added Back?

• Gifts under calendar-year taxation (暦年課税): A person who acquires property through inheritance or a bequest must add back the property received by gift from the deceased within a set period, valued at the time of the gift. For deaths on or before December 31, 2026, the period is the 3 years before death. From 2027 it is extended gradually by date of death, and for deaths on or after January 1, 2031 it is 7 years.
• JPY 1 million deducted from the extended part: When the inheritance begins on or after January 2, 2027, gifts made in the extended part of the period, that is, earlier than 3 years before death, are totaled and JPY 1 million is deducted before they are added back.
• Gifts that were not taxed must also be added back: Gifts of JPY 1.1 million or less in a year that did not attract gift tax, and gifts made in the year of death, are included within the period. Not added back are the portion equal to the spousal deduction on a gift of a home between spouses, and several other categories of property listed by the National Tax Agency (国税庁).
• Gifts under settlement-at-inheritance taxation: These are also added back at their value at the time of the gift. For property received from 2024, the annual basic deduction of JPY 1.1 million is subtracted each year before the add-back.

Gift tax already paid on added-back gifts can be deducted from the inheritance tax. If gift tax paid under settlement-at-inheritance taxation cannot be fully deducted, the excess can be refunded through the inheritance tax return.

How Much Can the Land Special Rule Reduce?

The small-scale residential land special rule (小規模宅地等の特例) first reduces the valuation of qualifying residential land, and the net estate is calculated afterward. The reduction depends on how the land was originally used:

• Residential land where the deceased lived (特定居住用宅地等): 80% reduction on up to 330 square meters.
• Land used for a business (特定事業用宅地等, 特定同族会社事業用宅地等): 80% reduction on up to 400 square meters.
• Land used for rental (貸付事業用宅地等): 50% reduction on up to 200 square meters.

Land that began to be rented out within 3 years before the inheritance began is, as a rule, excluded (with exceptions). Each category has further requirements on who acquires the land, how it is used and how it is held, and when categories are combined, the total area is capped. If the deceased lived in Taiwan or Hong Kong and the Japanese house was not where they lived during their lifetime, the house does not fall into the first category.

What Is the Basic Deduction, and Who Counts as a Statutory Heir?

The basic deduction is JPY 30 million plus JPY 6 million multiplied by the number of statutory heirs (法定相続人の数). With 2 statutory heirs it is JPY 42 million, and with 3 it is JPY 48 million. If the net estate does not exceed this amount, a return is generally not required, and an estate exactly equal to the deduction is not taxed. However, a return is still required if the estate falls to or below the basic deduction only after applying the small-scale residential land special rule.

The number of heirs is determined under the Japanese Civil Code. Keep the following rules in mind:

• A person who renounces the inheritance is still counted. When someone renounces, the number is still calculated as if nobody had renounced, so the basic deduction does not fall.
• Adopted children are capped. If the deceased had biological children (実子), at most 1 adopted child is counted. If there were no biological children, at most 2 are counted. For example, if the heirs are 1 biological child and 2 adopted children, there are 3 actual heirs, but the number used for the tax is 2. Special adoptions (特別養子), a spouse’s biological child adopted by the deceased, and grandchildren who inherit by representation (代襲相続) are treated as biological children. This rule affects only the number used for the tax calculation and does not affect an adopted child’s right to inherit.
• When the deceased was a foreign national: Succession follows the deceased’s national law, which decides who the heirs are and what each receives. As of September 2026, the number of heirs used for the basic deduction and the family’s total inheritance tax is still calculated under the rules of the Japanese Civil Code. Which place’s law counts as the national law for a deceased person from Taiwan or Hong Kong must be confirmed case by case with a Japanese tax accountant (税理士).

For heirs who live overseas and are taxed only on Japanese assets, the law as of September 2026 does not change how the basic deduction is calculated. The difference is that only the Japanese assets are counted in their net estate.

How Are the Tax Bands Applied?

The rates are applied to “the amount acquired corresponding to each statutory share”. Take the total taxable estate (課税遺産総額), which is the net estate minus the basic deduction, and multiply it by each statutory heir’s statutory share (法定相続分), rounding down any amount below JPY 1,000. This step has nothing to do with how the estate is actually divided.

The statutory shares used for the calculation follow the Japanese Civil Code:

• Spouse and children: the spouse takes 1/2 and the children share 1/2 in total.
• Spouse and parents or other direct ascendants: the spouse takes 2/3 and the ascendants share 1/3.
• Spouse and siblings: the spouse takes 3/4 and the siblings share 1/4.
• Several people in the same rank share equally. A half-sibling who shares only one parent receives half of what a full sibling receives. There are further rules, such as representation.

Each notional share is then run through the inheritance tax quick-calculation table (相続税の速算表):

The tax on each share is the amount acquired multiplied by the rate, minus the quick-calculation deduction. The deduction is only an arithmetic shortcut. It is not a separate tax-free allowance. The 55% rate applies to the portion of a share above JPY 600 million, not to the whole estate.

**Example: the National Tax Agency’s worked case, a wife and two children**

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The statutory heirs are the wife and 2 children, so the basic deduction is JPY 30 million + JPY 6 million x 3 = JPY 48 million. Suppose that after subtracting the basic deduction from the net estate, the total taxable estate is JPY 152 million.

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• Statutory shares: wife 1/2, each child 1/4. – Amount acquired for each statutory share: wife JPY 76 million, each child JPY 38 million. – Applying the table: wife JPY 76 million x 30% – JPY 7 million = JPY 15.8 million; each child JPY 38 million x 20% – JPY 2 million = JPY 5.6 million. – Total: JPY 15.8 million + JPY 5.6 million x 2 = JPY 27 million, which is the total inheritance tax for the whole family.

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JPY 27 million is not the amount this family pays. It must still be split according to what each person actually receives, and reliefs are then subtracted. If the wife actually receives exactly her statutory share, which falls within the spouse’s relief, the tax allocated to her falls to zero, but she must still file a return. For the children’s portions, any other available relief is then considered.

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This is the National Tax Agency’s illustrative case. It assumes the total taxable estate has already been determined and that there are no other deductions. The actual tax is whatever the filed return calculates.

Once the Total Is Known, How Much Does Each Person Pay?

The family’s total inheritance tax is divided in proportion to each person’s taxable value as a share of the combined taxable value of all recipients. This is the step at which the actual division of the estate matters.

Some recipients must pay a 20% surcharge on their allocated tax, called the 20% surcharge on inheritance tax (相続税額の2割加算). It is added before reliefs are subtracted:

• Who pays the surcharge: Recipients other than the deceased’s spouse, parents or children, for example siblings, people inheriting as nephews or nieces, grandparents and legatees who are not relatives.
• Who does not: The spouse, parents, children (including adopted children), and grandchildren who become heirs by representation.
• A grandchild adopted as a child: A grandchild who is adopted, rather than inheriting by representation, still pays the surcharge.

Finally the available reliefs are subtracted. The remainder is the tax each person must pay. If the result is negative, it is treated as zero.

How Does the Spouse’s Tax Reduction Work, and When Can’t It Be Used?

For the net estate a spouse actually receives through division of the estate or a bequest, no inheritance tax is charged up to the greater of JPY 160 million or the spouse’s statutory share. Anything above that is taxed as usual. In Japanese this relief is called the tax reduction for a spouse (配偶者の税額の軽減). It reduces only the spouse’s own tax and does not reduce the tax allocated to other heirs. Concealed or disguised assets are outside the relief.

Here, “spouse” means a husband or wife who is legally registered as married. A common-law partner (内縁) without registration is not included.

Three conditions apply:

• A return must be filed. Even if the tax is zero after the reduction, an inheritance tax return must be submitted. Without it the relief cannot be used.
• Documents must be attached. The return must include a family register transcript (戸籍謄本) and similar documents, together with a copy of the will or the estate division agreement, or other documents showing which assets the spouse received. If a copy of the estate division agreement is attached, the seal certificates of all heirs must also be attached. For families who live overseas and do not have these Japanese documents, it is best to confirm with the tax office or a tax accountant what can be submitted in their place.
• The estate must be divided before the filing deadline. The reduction is calculated on the assets the spouse actually receives, so assets not yet divided by the deadline do not qualify.

The last point matters especially for families that must complete succession formalities in more than one place. The Japanese filing deadline is 10 months from the day after the heir learns that the inheritance has begun. If the estate has not been divided by then, there are these options:

• Attach a “plan for division within 3 years after the filing deadline” (申告期限後3年以内の分割見込書) to the return. If the estate is divided within 3 years after the deadline, the reduction can still be applied.
• If division is impossible within 3 years for unavoidable reasons and the head of the tax office approves, division within 4 months from the day after the reason ceases also qualifies.
• If the estate is divided after filing and the reduction is wanted, a request for correction (更正の請求) must be made within 4 months from the day after the division is concluded.

Do Other Reliefs Apply to Heirs Who Live Overseas?

• Minor’s deduction (未成年者控除): A statutory heir under 18 can deduct JPY 100,000 multiplied by the number of years until age 18, counting any period under a year as one year. A limited taxpayer taxed only on Japanese assets cannot use it. An heir who lives overseas but is also taxed on assets outside Japan is within its scope.
• Deduction for persons with disabilities (障害者控除): A statutory heir with a disability can deduct JPY 100,000 (JPY 200,000 for a person with a special disability, 特別障害者) multiplied by the number of years until age 85. The National Tax Agency lists the eligible persons as those who had an address in Japan when they acquired the property (with exceptions). On this explanation, an heir living overseas cannot use it.
• Foreign tax credit (外国税額控除): If assets outside Japan are taxed locally with a tax equivalent to inheritance tax, that tax can be deducted from the Japanese inheritance tax, up to a proportional limit. As of September 2026, on the wording of the statute, an estate tax charged by Taiwan on Japanese property is not within the scope of this credit. Whether Taiwan can credit Japanese tax is covered in the article “Taiwanese and Hong Kong Families Inheriting Japanese Property: How Filings and Foreign Tax Credits Connect Between the Two Places”.

Situations That Call for Extra Care

• The deceased was a foreign national and the estate is not divided by the filing deadline: The family’s total inheritance tax is calculated under the Japanese Civil Code, but each person’s taxable value must be worked out according to the heirs and shares set by the deceased’s national law. Both sets of rules apply at once.
• An heir is also taxed on assets outside Japan: That heir’s taxable value includes the assets acquired outside Japan, so the combined taxable value of the family rises and the total tax differs. How the scope of taxation is determined is covered in the article “Who Pays Japanese Inheritance Tax? How Residence, Nationality and Years of Residence Set the Scope”.

What to Work Out Next

1. Confirm the scope of taxation first. For each heir, determine whether only Japanese assets are taxed or assets outside Japan too. This decides which assets count. If unsure, return to the main article or the related article on the scope of taxation.
2. List the statutory heirs. Count them under the Japanese Civil Code and work out the basic deduction.
3. Value the Japanese property. Value it under the inheritance tax rules, subtract deductible debts, and check whether the result exceeds the basic deduction. A Japanese tax accountant can confirm the valuation.
4. Estimate the family’s total. If the estate exceeds the deduction, estimate the total inheritance tax using the table above. When deciding how the estate will be divided, consider the spouse’s reduction and whether division can be completed before the filing deadline.
5. Then look at formalities and the home country side. The filing deadline, the tax representative and the inheritance registration are covered in the article “The Process of Inheriting Japanese Property: Filing Deadlines, Inheritance Registration and the Tax Representative”. Whether Taiwan requires the property to be included in its estate tax, and whether credit is available, is covered in the related article on Taiwan and Hong Kong families.

Japan Inheritance Tax Calculation FAQ

If the whole estate goes to one child, does the total inheritance tax change?

The total does not change. It depends only on the number of statutory heirs and their statutory shares, not on how the estate is actually divided. However, the spouse’s tax reduction depends on how much the spouse actually receives. If the spouse receives less, less is relieved, and the tax the family actually pays may be higher.

If someone renounces the inheritance, does the basic deduction fall?

No. The number of statutory heirs used for the basic deduction is counted as if nobody had renounced. For example, with a spouse and 2 children, if 1 child renounces, the number is still 3 and the basic deduction is still JPY 48 million.

If a spouse inherits the Japanese property, is there no inheritance tax at all?

Not necessarily. No tax applies only up to the greater of JPY 160 million or the spouse’s statutory share of the net estate the spouse actually receives. The excess is taxed as usual. The relief applies only if a return is filed, and assets not yet divided by the filing deadline cannot be covered for the time being.

Glossary

• Inheritance tax (相続税): Japan’s estate tax, paid by those who acquire property through inheritance or a bequest.
• Basic deduction (基礎控除額): The amount subtracted first from the net estate, currently JPY 30 million plus JPY 6 million multiplied by the number of statutory heirs.
• Statutory share (法定相続分): Each heir’s proportion under the Japanese Civil Code, used to calculate the family’s total tax.
• Total taxable estate (課税遺産総額): The net estate minus the basic deduction, which is the portion the rates are applied to.
• Total inheritance tax (相続税の総額): The sum of the tax on each notional share after a statutory-share division, which is then allocated to each person in proportion to what they actually receive.
• Limited taxpayer (制限納税義務者): An heir taxed on inheritance tax only for assets located in Japan.
• Tax reduction for a spouse (配偶者の税額の軽減): The system under which the net estate a spouse actually receives is not taxed up to a set amount. This article calls it the spouse’s tax reduction.
• Request for correction (更正の請求): The procedure for asking the tax office to reduce tax after filing, based on a correct calculation.
• Small-scale residential land special rule (小規模宅地等の特例): The system that reduces the valuation of qualifying residential, business and rental land up to a limit of area.

About the Information

• This article was checked as of September 30, 2026. It is based on Japan’s Inheritance Tax Act, Civil Code and Act on General Rules for Application of Laws (法の適用に関する通則法), and on the National Tax Agency’s Tax Answers (タックスアンサー), filing guide (for 2026, Reiwa 8) and Q&A cases. The Taiwan portions are based on Taiwan’s Estate and Gift Tax Act.
• Several points below are applications or inferences drawn from the wording of the law, with no direct official statement for these situations:
  • For heirs who live overseas and are taxed only on Japanese assets, the basic deduction is calculated the same way: Article 15 of the Inheritance Tax Act does not distinguish by taxpayer category.
  • When the deceased was a foreign national, the number of heirs for the basic deduction and the family’s total tax are calculated under the Japanese Civil Code: this comes from the premise of a question in a National Tax Agency Q&A case, which the Agency’s answer did not contradict. How the national law of a Taiwanese or Hong Kong decedent is determined was not checked.
  • Taiwan’s estate tax on Japanese property cannot be deducted from Japanese inheritance tax: this follows the wording of Article 20-2 of the Inheritance Tax Act, and the Basic Circular on the Inheritance Tax Act was not checked.
  • The example is the National Tax Agency’s worked case and goes only as far as the family’s total inheritance tax. The basic deduction of JPY 48 million is calculated from the formula. That the wife’s tax is zero when she receives her statutory share is an application of the spouse reduction rules.
  • The add-back period for lifetime gifts is extended in stages from 2027 by date of death, and is 7 years for deaths on or after January 1, 2031. The JPY 1 million deduction for the extended part applies to inheritances beginning on or after January 2, 2027. What substitutes for the family register transcript and seal certificate when an overseas family claims the spouse reduction is outside what was checked.

Have a question about this guide? Leave a comment below, or ask Zagdim directly.

Sources

• e-Gov Law Search: Inheritance Tax Act (Act No. 73 of 1950)
• e-Gov Law Search: Civil Code (Act No. 89 of 1896)
• e-Gov Law Search: Act on General Rules for Application of Laws (Act No. 78 of 2006)
• 国税庁－タックスアンサー No.4102 相続税がかかる場合
• 国税庁－タックスアンサー No.4126 相続財産から控除できる債務
• 国税庁－タックスアンサー No.4152 相続税の計算
• 国税庁－タックスアンサー No.4155 相続税の税率
• 国税庁－タックスアンサー No.4157 相続税額の2割加算
• 国税庁－タックスアンサー No.4158 配偶者の税額の軽減
• 国税庁－タックスアンサー No.4164 未成年者の税額控除
• 国税庁－タックスアンサー No.4167 障害者の税額控除
• 国税庁－タックスアンサー No.4124 小規模宅地等の特例
• 国税庁－タックスアンサー No.4602 土地家屋の評価
• 国税庁－タックスアンサー No.4161 贈与財産の加算と税額控除（暦年課税）
• 国税庁－相続税及び贈与税の税制改正のあらまし（令和5年度）
• 国税庁－タックスアンサー No.4103 相続時精算課税の選択
• 国税庁－相続税の申告のしかた（令和8年分用）
• 国税庁－質疑応答事例 被相続人が外国人である場合の未分割遺産に対する課税
• 法務部全國法規資料庫－遺產及贈與稅法 (Taiwan Estate and Gift Tax Act)

Important Notice

This article is a general information summary and does not constitute tax or legal advice for any individual case. Information was checked as of September 30, 2026. Japanese and Taiwanese rules may change, so please rely on the current notices of the competent authority in each place, and consult a qualified professional for your own case.