NISA Assets Are Surging! "Inheritance Procedures" and "3 Blind Spots" to Avoid Panic in Emergencies

Hello. I am Suenaga, a tax accountant specializing in inheritance and business succession in Asaminami-ku, Hiroshima City.

Over the past few years, due to the expansion of investment quotas through tax reforms and the impact of rising global stock prices, I imagine many people have realized that their NISA (Nippon Individual Savings Account) balance has grown more than expected.

It is wonderful that your asset management is going well.
However, if the account holder passes away, what happens to the NISA assets left behind?

"Since NISA is tax-exempt, there is no inheritance tax and the procedures are simple, right?"

Actually, this is the most dangerous misconception.

The larger the assets in a NISA account, the greater the tax pitfalls when an inheritance occurs.

In this article, I will thoroughly explain the action plan to take when a NISA account holder passes away, as well as the points you absolutely must know.

The "4 Steps" of NISA Account Inheritance Procedures

NISA account assets do not automatically transfer to a family member's account just because the account holder has passed away.

First, let's grasp the general flow of the procedures.

Step 1: Contacting the Financial Institution and Freezing the Account

Notify the securities company or bank where the NISA account is held that the account holder has passed away. Once notified, the account will be "frozen," and no new trades or withdrawals can be made.

At the same time, request the necessary documents for inheritance procedures (instruction guide) and a balance certificate as of the date of death.

Step 2: Collecting Necessary Documents

Gather the documents specified by the financial institution. Generally, the following are required:

Step 3: Opening a "Specified Account" for the Heir

This is the most important point. You cannot inherit the deceased's NISA assets as they are. The inheriting heir must have an account (general account or specified account) at the "same securities company (financial institution)." If they do not have one, they must open a new account at that securities company.

Step 4: Execution of Transfer (Change of Name)

Once the documents are accepted, the stocks and investment trusts in the deceased's NISA account will be "transferred" to the heir's account. This completes the procedure.

The "3 Blind Spots" You Must Be Careful About Precisely Because the Amounts Have Grown

If your NISA balance exceeds several million or even ten million yen, neglecting the following points could lead to unexpected tax burdens or trouble later on.

Blind Spot 1: Only Income Tax is "Tax-Free"! Inheritance Tax Definitely Applies

Because the image of "NISA = tax-free" is so strong, many people mistakenly believe that "inheritance tax does not apply either."

However, the tax-free benefits of NISA are strictly limited to "income tax and resident tax on investment gains and dividends during one's lifetime."

It is a system that makes dividends and capital gains tax-free only while the person who opened the NISA account and invested is still alive.

Therefore, if there is a balance in the NISA account when the person passes away, inheritance tax will apply!!

The balance of the NISA account (market value) at the time the account holder passes away, is entirely subject to inheritance tax. If the total amount, when combined with other assets such as savings and real estate, exceeds the basic deduction (30 million yen + 6 million yen × the number of statutory heirs), an inheritance tax return must be filed and tax paid.

The larger the amount has grown, the sooner you need to estimate the inheritance tax.

Blind Spot 2: The "Tax-Free Allowance" Disappears at the Time of Death

When an heir inherits assets from a NISA account, they cannot transfer them directly into their own NISA account.

In short, the "tax-free allowance" is limited to that individual only.

Therefore, capital gains and dividends after the inheritance will be subject to the standard tax of approximately 20%.

"Continuing to manage the assets tax-free by inheriting a parent's NISA as is" is impossible.

Blind Spot 3: The "Acquisition Cost" Trap After Inheritance

When inheriting assets that have significantly increased in value (with unrealized gains), the "principal (acquisition cost)" for the heir is reset to the "market value on the date of death."

At first glance, this seems advantageous because you inherit at a higher value, but the problem arises in cases where there has been a "major market crash resulting in significant losses."

The larger the asset scale, the more the volatility of the stock price at the time of death directly impacts the heir's subsequent tax burden.

National Tax Agency: Q24 What happens when a tax-exempt account holder passes away

Pre-inheritance measures and advice to prevent trouble

If your or your family's NISA balance has grown large, there are measures you can take now.

Share "which securities company you use" with your family

In the case of online brokerages (such as SBI Securities or Rakuten Securities), there are no physical branches, no passbooks, and no mail, which creates a risk that family members may not even realize the account exists.

You don't have to share your smartphone apps or login details, but please at least write down in an ending note or similar document that "there is a NISA account at XX Securities."

And while you might feel hesitant to disclose your ID and password "while you are still alive," please at least ensure that in the event of an emergency, they know "it is here."

If they cannot log in, it is possible that no procedures can proceed at all.

Heirs should also open an account at the same securities company

To ensure a smooth transfer in the event of an emergency, having your spouse or children open an account at the same securities company can significantly reduce the time required for procedures.

In my own home, my spouse and I have opened NISA accounts at different securities companies, so if one of us passes away, the other will need to open a securities account at the deceased's firm, which I find to be very troublesome.

In my home as well, it seems it will be important to organize things in advance as part of end-of-life planning.

Decide "who will inherit your NISA" in your will

Because investment trusts and stocks fluctuate daily, their value may decrease while inheritance division discussions are prolonged.

If you specify the successor in your will, you can proceed with the transfer procedures quickly.

Summary: If your assets are large, organizing them while you are alive is essential

NISA is a fantastic tool for asset building, but when it comes to the exit (inheritance), it requires far more steps and tax knowledge than regular savings.

In particular, for those whose assets have grown significantly due to increased investment amounts since the start of the new NISA and the global stock market rally, the greatest kindness you can show your family is to understand the mechanisms and share information in advance so they do not panic.

"Will inheritance tax apply to my family?"
"I'm worried about the procedures for online securities..."
If you have these concerns, we recommend consulting with a professional, such as a tax accountant specializing in inheritance, before your assets grow too large.

◆ Office Information

Our office provides total support, focusing on Asaminami-ku, Hiroshima City, ranging from inheritance procedures for the latest digital and investment assets, including NISA and iDeCo, to future-oriented business succession and inheritance tax planning.

Please feel free to consult with us to protect "your family's smiles."

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