Japan Inheritance Tax Rates (10% to 55%) — Complete Bracket Guide
Japan imposes inheritance tax (相続税, souzokuzei) using a progressive bracket system with rates ranging from 10% to 55%. Unlike many countries that tax each heir individually, Japan first calculates the total estate tax using a unique per-heir splitting method, then allocates the tax to each heir. This guide explains the brackets, the calculation method, and provides worked examples.
Inheritance Tax Bracket Table
The following table shows the progressive tax brackets applied to each statutory heir's calculated share of the taxable estate. These rates are set by Article 16 of the Inheritance Tax Act.
| Taxable Amount per Heir | Rate | Deduction |
|---|---|---|
| Up to ¥1,000万 | 10% | ¥0万 |
| ¥1,000万 to ¥3,000万 | 15% | ¥50万 |
| ¥3,000万 to ¥5,000万 | 20% | ¥200万 |
| ¥5,000万 to ¥10,000万 | 30% | ¥700万 |
| ¥10,000万 to ¥20,000万 | 40% | ¥1,700万 |
| ¥20,000万 to ¥30,000万 | 45% | ¥2,750万 |
| ¥30,000万 to ¥60,000万 | 50% | ¥4,200万 |
| Over ¥60,000万 | 55% | ¥7,200万 |
Source: National Tax Agency (国税庁), FY2025. 1万 = ¥10,000.
How Per-Heir Calculation Works
Japan's inheritance tax uses a unique two-step process that differs from most countries:
- Calculate the taxable estate: Total estate value minus the basic deduction (¥30,000,000 + ¥6,000,000 x number of statutory heirs).
- Split by statutory shares: Divide the taxable estate according to each statutory heir's legal share (regardless of who actually inherits what).
- Apply brackets to each share: Calculate the tax on each heir's statutory share using the progressive brackets above.
- Sum the total tax: Add up all the individual tax amounts to get the total estate tax.
- Allocate to actual heirs: Distribute the total tax to each heir based on what they actually inherit.
This means that more heirs result in lower total tax, because the estate is split into smaller portions that are taxed at lower marginal rates.
Example: ¥100 Million Estate with 2 Heirs
A parent passes away leaving ¥100 million to a spouse and one child (2 statutory heirs).
Basic deduction: ¥30M + ¥6M x 2 = ¥42,000,000
Taxable estate: ¥100M - ¥42M = ¥58,000,000
Spouse's statutory share (1/2): ¥29,000,000 → Tax: ¥29M x 15% - ¥500,000 = ¥3,850,000
Child's statutory share (1/2): ¥29,000,000 → Tax: ¥29M x 15% - ¥500,000 = ¥3,850,000
Total tax before deductions: ¥7,700,000
The spouse can then apply the spousal deduction to reduce or eliminate their share of this tax.
Example: ¥100 Million Estate with 3 Heirs
Same ¥100 million estate, but now with a spouse and two children (3 statutory heirs).
Basic deduction: ¥30M + ¥6M x 3 = ¥48,000,000
Taxable estate: ¥100M - ¥48M = ¥52,000,000
Spouse's statutory share (1/2): ¥26,000,000 → Tax: ¥26M x 15% - ¥500,000 = ¥3,400,000
Child 1's share (1/4): ¥13,000,000 → Tax: ¥13M x 15% - ¥500,000 = ¥1,450,000
Child 2's share (1/4): ¥13,000,000 → Tax: ¥13M x 15% - ¥500,000 = ¥1,450,000
Total tax before deductions: ¥6,300,000
¥1,400,000 less than the 2-heir scenario — demonstrating the per-heir splitting benefit.
Key Points for Foreign Residents
- The same tax brackets apply regardless of the heir's nationality or residence status.
- Non-resident heirs who are not Japanese nationals may only be taxed on Japan-situated assets, but the same rate table applies.
- A 20% surcharge (2割加算) is applied to heirs who are not the spouse, children, or parents of the decedent (e.g., siblings, nieces, nephews).
- Foreign tax credits may offset double taxation if inheritance tax was paid in another country.
FAQ
What is the highest inheritance tax rate in Japan?
The highest marginal rate is 55%, which applies to the portion of each statutory heir's share exceeding ¥600 million. However, due to the progressive bracket system and per-heir splitting, the effective rate on the total estate is always lower than 55%.
How is the basic deduction calculated for inheritance tax?
The basic deduction (基礎控除) is ¥30,000,000 plus ¥6,000,000 per statutory heir. For example, a spouse and two children (3 heirs) receive a basic deduction of ¥48,000,000. Estates below this threshold owe no inheritance tax.
Does each heir pay tax on the full estate?
No. Japan uses a unique per-heir calculation method. The taxable estate is first divided by the number of statutory heirs according to statutory shares, tax is calculated on each share using the progressive brackets, and then the total tax is allocated to actual heirs based on what they actually inherit.
Related Guides
This guide provides general information only. It does not constitute tax advice or tax filing services. Please consult a licensed tax professional (税理士) for accurate calculations.