Will you lose out if you neglect inheritance planning? The unavoidable risks of tax increases, late payment penalties, and additional taxes

"We don't have that many assets, so
isn't inheritance planning a bit of an exaggeration?"
Those who think this way are at high risk.

It is not uncommon for tax burdens and procedural troubles to arise from neglecting inheritance planning.
This time, I will explain
the risks that can actually occur from three perspectives.

1. The risk of excessive inheritance tax

■ Once you exceed the basic deduction, you are immediately subject to tax

Inheritance tax has a
"basic deduction (30 million yen + 6 million yen × number of statutory heirs)," but when real estate, cash, insurance, etc., accumulate,

you may exceed the deduction without realizing it
in some cases.

If you do not plan for gifts or division via a will in advance,
you will be subject to taxation "all at once," resulting in an unexpected tax amount to pay.

■ Not enough funds for tax payment, so you have to sell real estate in a hurry?

If most of the inherited assets are real estate,
you may not be able to pay inheritance tax in cash and be forced to sell in some cases.
If the timing is bad, it can lead to
disposing of it for less than the market price.

2. The risk of late payment penalties and additional taxes

■ "Late payment tax" if you miss the filing deadline

The deadline for filing and paying inheritance tax is

If you miss this deadline, "late payment tax" will be incurred.
In particular, if the division of the estate does not progress and procedures stall, it is easy to exceed the time limit.

■ "Additional tax" for failure to report or non-filing

• If you did not report part of the estate

• If you did not file at all

In such cases, "additional tax (5-20%)" will be imposed.
Unfortunately, "I didn't know" or "I was too busy to make it in time" will not be accepted.

3. Specific problems and impacts that are likely to occur

■ Double work and increased costs due to "provisional filing"

If an inheritance division agreement is not reached and you file a provisional tax return based on statutory shares,
you will need to file an amended or corrected tax return once an agreement is reached later.
As a result, tax accountant fees and effort will double.

■ Special exemptions and preferential measures may become unavailable

• Special provisions for small-scale residential land, etc.

• Spousal deductions and preferential treatment for residential property

These are only applied if inheritance procedures are carried out appropriately. If there is a lack of planning or errors in filing,
there is a risk that special exemptions you should have been able to use will be invalidated.

■ Extra procedures, time, and costs will be incurred

• Bank accounts are frozen and cannot be withdrawn from

• Real estate title transfers cannot proceed, preventing sales

• The tax office conducts an audit, leaving you busy responding to it

These are all
**unnecessary expenses and stress that occur as a result of neglecting inheritance planning**.

Summary: Inheritance planning has value beyond just "reducing taxes"

If inheritance planning is insufficient, the
possibility of incurring taxes and costs that you would not otherwise have to pay increases. And the burden of that will fall on the family left behind.

Isn't this the greatest consideration you can show your family?

Please enjoy our past articles as well.