1. Shocking Reality! Japan’s Cryptocurrency Inheritance Tax Is Abnormally High
Did you know that Japan’s inheritance tax has a maximum rate of 55%, making it one of the highest in the world among major economies? This is an unprecedentedly high tax burden, reaching up to 65% when including local taxes. What’s even more alarming is the possibility of double taxation on inherited cryptocurrencies. In addition to the 55% inheritance tax, if the inheritor later sells the cryptocurrency, they will be subject to an additional capital gains tax of up to 55%, potentially resulting in a total tax burden exceeding 110%. In other words, the inheritor could end up paying more in taxes than the actual value of the inherited assets! This shocking reality highlights how exceptionally harsh Japan’s cryptocurrency inheritance tax system is.
2. [G20 Comparison] Cryptocurrency Inheritance Tax Rankings! Japan Ranks Worst at No.1
So, how does Japan’s inheritance tax compare globally? The following ranking of G20 countries’ maximum inheritance tax rates makes it clear just how extreme Japan’s tax burden is:
| Country | Maximum Inheritance Tax Rate |
|---|---|
| Japan | 55% (World’s Highest) |
| South Korea | 50% |
| France | 45% |
| United Kingdom | 40% |
| United States | 40% (With a high tax-free allowance of about $13 million) |
| Germany | 30% |
| Italy | 4% |
| Canada | 0% |
| Australia | 0% |
| China | 0% |
| Russia | 0% |
Japan ranks No.1 in the world for the highest inheritance tax, surpassing even South Korea (50%) and France (45%). The tax burden is significantly higher than that of major Western nations such as the UK and the US (both at 40%), especially considering that the US has an exemption threshold of over $13 million, meaning most citizens don’t even pay inheritance tax.
What’s even more shocking is that many major economies, including Canada, Australia, China, and Russia, have no inheritance tax at all. This means that Japan’s cryptocurrency inheritance tax is by far the harshest among G20 nations, making it arguably the worst country for inheriting digital assets.
3. The Double Taxation Trap: Why Only Japanese Are Suffering
Japan’s cryptocurrency inheritance tax problem is not just about the high tax rate—it also involves double taxation. In most countries, when an asset is inherited, its cost basis (purchase price) is reset to its fair market value at the time of inheritance (a practice known as a step-up in basis). For example, in the US, inherited assets are automatically revalued to their market price at the time of death, meaning that if the heir sells them immediately, they won’t owe capital gains tax.
However, Japan does not have this step-up system. Instead, the inheritor must use the original purchase price of the deceased, not the market value at the time of inheritance. This means that if a deceased person bought Bitcoin at a low price years ago and its value surged, the heir would be forced to pay capital gains tax on the entire increase in value, in addition to the initial 55% inheritance tax.
For example, if a parent purchased Bitcoin at $10,000, and it was worth $1,000,000 at the time of inheritance:
- In the US/UK: The heir’s cost basis resets to $1,000,000 → If they sell it immediately, no capital gains tax is due.
- In Japan: The heir’s cost basis remains $10,000 → If they sell it at $1,000,000, they must pay capital gains tax on the $990,000 profit!
This means that only Japan enforces double taxation (inheritance tax + capital gains tax), resulting in an extraordinarily unfair system that essentially confiscates wealth through taxation. In contrast, most other countries either abolish inheritance tax altogether or at least ensure that inheritors are not unfairly double-taxed.
4. Your Wealth Will Be Taken! The Urgent Need for Tax Reform
Due to Japan’s extreme inheritance tax, more and more wealthy individuals are considering relocating abroad. Japan is now experiencing a mass exodus of high-net-worth individuals, similar to China. Since the maximum inheritance tax rate was raised to 55% in 2015, wealthy families have increasingly been moving their assets and residency overseas.
Japan’s inheritance tax is essentially double taxation, which is why it has been criticized as an unfair system. If left unchanged, it will continue to drive capital and talent out of the country, further damaging Japan’s economy. Globally, many countries are reducing or eliminating inheritance taxes, but Japan’s system remains outdated. Reform is urgently needed.
Possible solutions include:
- Introducing the step-up in basis system, so that inherited assets are valued at market price upon inheritance.
- Lowering inheritance tax rates to align with international standards.
- Expanding tax-free allowances so that ordinary families are not unfairly burdened.
Without such reforms, Japan will continue to see wealth and talent fleeing overseas, further harming its long-term economic prospects.
5. What Can You Do? Strategies to Protect Your Wealth
If you are worried about Japan’s excessive inheritance tax, here are some legal ways to protect your assets:
- Use Annual Gifting: Japan allows tax-free annual gifts of up to ¥1.1 million per recipient. By gradually transferring assets over time, you can significantly reduce the taxable estate.
- Use Corporations: Instead of holding assets as an individual, setting up a corporation to manage your cryptocurrency holdings can help lower tax liability and change how the assets are transferred upon inheritance.
- Move Overseas: Some high-net-worth individuals are relocating to tax-friendly jurisdictions like Singapore or Hong Kong, where inheritance tax does not exist. However, Japan has a 10-year expatriate rule, meaning that former residents remain subject to inheritance tax on global assets for 10 years after leaving the country.
- Use Life Insurance & Trusts: Life insurance payouts are tax-exempt up to certain limits, and trusts can help defer or mitigate taxation.
Conclusion: Japan’s Cryptocurrency Inheritance Tax Is Outrageous
Japan’s inheritance tax on cryptocurrency is the highest in the world and is uniquely unfair due to its double taxation system. As global wealth becomes more mobile, Japan’s outdated tax system is driving capital and talent abroad. Taxpayers must take action by legally protecting their assets and advocating for tax reform.
If Japan fails to modernize its tax policies, it will continue to push its citizens into financial ruin while wealthier nations attract capital and talent with more reasonable tax systems. The time for action is now—both at an individual level through strategic planning and at a national level through urgent tax reforms.
