I found the pitfalls of gifting during my lifetime, but what should I do after all

My father, who will soon retire, asked me, “I want to give a gift during my lifetime, so I want to discuss it.”

As for this, “I'll do something about it myself, so I don't need anything. The stance is “use it for yourself,” but I'm not so particular about it that I'm adamant, so I decided to thank them.

It's also a sensitive topic, so I think the father who approached his child from his parents while his mind and body were in good shape is great, so I want to do an apprenticeship myself.

So, in order to receive it, I studied hard about the tax system for inheritance and gifts.

As was the case with savings and investments, I had no choice but to study hard.

In the first place, inheritance tax deductions are huge, so less than 10% of tax payments occur.

Negative inheritances, such as debts, also occur.

There are also things that require market value evaluation, such as real estate and stocks, and how to do that.

Details of tax system reforms relating to gifts.

etc etc.

Regarding “tax exempt up to 1.1 million yen per year,” which I have heard about gifts, it seems that the rule “gifts up to 3 years before the inheritance timing are added back to inherited property” extended to “7 years ago” due to tax system reforms.

One of the main purposes of tax reform is to “promote income transfer to the younger generation.”

Certainly, “1000 trillion yen, which is about half of the financial assets of Japanese people, is a deposit and savings account,” and since most of them belong to the elderly, it is important to make it easier to invest and consume.

So, when I did a lot of research and was wondering if it would be okay to “normally receive an amount of money within 1.1 million yen as a gift during my lifetime,” new information jumped in.

In short, it seems that if there is a gift agreement (including verbal promises) where “10,000 yen is gifted every year for △ years,” it is assumed that “a gift with a total amount of ○×△ yen has occurred” and will be taxed.

Well, it's not that I don't understand logic, but that's bothersome.

Since “gifts up to 1.1 million yen per year are tax-free,” there are probably many people who start giving gifts during their lifetime by deciding “I'll give gifts of up to 1.1 million yen or less every year.”

There it says “Yes! Maybe it's within 1.1 million yen this year, but they're going to give it every year from now on, right? So it's synonymous with the total amount being gifted, right? You're just paying it in installments, right? You'll be taxed on the total amount!” That's why I think that's pretty ridiculous.

It “promotes income transfers between generations,” so let me do that flexibly.

↑ video of how I learned about it

↑ something was displayed in Chinese, but this is the National Tax Agency's tax answer page

↑ What is the purpose of the system written

So, at the end of the day, what should I do, but I think “signing a gift agreement every year” is the correct answer, as Tax Answer says.

I also feel like it would be a good idea to make a proper contract, but the point is that “the same amount is given every year at the same time, but was this decided in advance to “give 100,000 yen every year”?” I think it's a story where you should answer “no, there is no phase collapse” when asked.

Somehow, there's a sense of incongruity.

Well, I'm glad I studied.

I recommend that everyone think about inheritance and gifts as soon as possible.

Furthermore, I received advice from my father, saying, “I'll leave the usage up to you, but from my experience, I feel that it's better to invest in a living space, so it's better to use it for investing in a house or something.”

Thankfully, I'm going to use it for future moving expenses, rent, etc.

There was also a time when I thought, “Why is this dad so fast,” and I'm thankful that he's so solid.

Let's teach our kids about money properly too.

To that end, I study every day.