Should it stay or should it go? UK-Japan money movement question

November 10, 2017 11:59 PM

I am a UK citizen, permanently based in Japan. I have several Japanese bank accounts, a UK bank account, but no UK address. A kind family member in the UK has given me £10,000 to use as I please. I don’t need this money right now, and probably won’t need it for the next 5 years, in fact.

My options seem to be:
• leave it in the UK
• have it transferred to an account here in Japan
• something else

As I understand things, if the family member dies in the next several years, there may be some tax liability. Also, Japan and the UK started sharing tax information some time ago, so there is undoubtedly a wrong way to go about dealing with the money.

I’m not overly concerned with investing this super-successfully, but it would be nice not to lose too much, either through taxes, exchange rates, etc.

So here’s the question: how do I look after this money without too much risk and as little paperwork / hassle as possible?

posted by anonymous to Work & Money (2 answers total)

Presumably you’re resident in Japan as far as the tax authorities are concerned.

As far as the UK is concerned, if the person who gave you this gift dies within the next seven years (IIRC) then their estate will owe inheritance tax on a sliding scale. There’s a £3000 a year exemption to this tax + the value of the remainder times the scale adjustment is added to the total estate in order to calculate the total amount of inheritance tax owed. As I understand things you personally won’t owe anything: it’s the estate of the deceased that will owe the money to the exchequer.

If you don’t need the money right now then personally I’d transfer this money to Japan & invest it in a whatever tax exempt stock market tracker you like, assuming Japan has such things. Maybe a mix of EU / US stock market trackers? Then I’d forget about it as far as possible :)
posted by pharm at 3:35 AM on November 11, 2017

Agreeing that it was the estate that would owe the money not you. When my father died he had fairly recently given my brother-in-law a gift of money of a few thousand pounds to buy a car. We paid the tax on that gift as if it was still in the estate, it didn't affect my brother-in-law or his car.
posted by plonkee at 5:57 AM on November 11, 2017