Need to cancel juminhyo, close bank account, remitting the balance to my US bank, managing property from the US

[glabrousdory4]

Hi, I’ll see if I can keep this simple but I need some pointers of what to keep in mind. Here’s some context to my situation. You can skip to the end for my questions:

1. I am a dual citizen, US and Japan. I was born and raised in Japan but currently living in the US. (let’s avoid talking about this, every time i post about this there seems to be a whole discussion about how you cant’t have dual citizenship but this isn’t what this post is about)
2. My father passed away last year, spent 4 months dealing with that from august 2022 to february 2023. It was a kodokushi with some damages to the property, so i’ve spent some time renovating the apartment.
3. I inherited money and the property which i currently manage through my real estate agent. I have a bank account that i left open from when i was in Japan (shinsei). I use this bank account to make any payments related to my property like property taxes and management fees.
4. My property currently has a tenant, which means i’m making a small income in Japan. Approximately 60000 yen/month. This started around august 2023. Still haven’t paid any income taxes related to this. I am not making any other income in japan besides this.
5. All income made stays in my bank in japan for now.
6. I moved back to the US with plans to go back to Japan after renovations on my apartment was complete. I went back to the US in February 2023 and I am still here. I plan to go to Japan in April of this year which is next month. I want to conclude my business in Japan in this next trip.

What i’m trying to accomplish:

1. I want to cancel my juminhyo, i’m paying for national healthcare each month with it.
2. By cancelling my juminhyo, this will mean i will need to close my bank account. Which means that i need to remit the amounts i have to my US bank.
3. I am not ready to sell my apartment, it still has the stigma from the kodokushi and the value of the property is low. I have a tenant in there now and my hope is the value of my apartment will grow after my first tenant leaves. Having this property is small extra income and overhead cost is low. Plan to sell in a few years or maybe keep it as a vacation home.

Finally these are my questions:

1. I want to manage the property without my japanese bank. I don’t plan to live in Japan so having a juminhyo isn’t ideal. I’m thinking that if all payments are done through furikomi, i can use my Wise account to manage my money. Anybody have any better ideas?
2. Now that i have income from my rental property, how do i pay taxes on that? Can I manage that without my japanese bank?
3. When i inherited the money, i don’t think i paid any inheritance taxes. Was i supposed to? How does inheriting money work in Japan? I have about 1,700,000 yen that inherited.
4. When sending all of the money i inherited to my US bank, does this get taxed? Or double taxed? I heard that if you file for some form, the US doesn’t tax any income made in japan. Is this true?
5. If i remit the money i have in my bank back home, id probably do this within the last week before i head back to japan after all of my businesses are taken care of. Can i do that around the time i close my bank account? Or should i expect there to be some delay that would prevent me from closing my account? Would it be better to transfer the money to my Wise account and keep it there until I’m ready to send it to my US bank?
6. I want to conclude my business in Japan, are there any things i should be aware of besides the items i listed above?

Sorry for the big post, i’m still new to this and everything happened suddenly, i feel a little bit lost about all of this.

Thanks in advance!

EDIT: I just wanted to add two more details that might be important to consider.

1. I have my jyusho set to my aunt’s address. For personal reasons i don’t plan to use that address going forward.
2. My property after the stigma is only worth around 200万. The highest with regular market price would be around 900万more or less:

 

[hark]

@glabrousdory4

1. Pretty sure no one here is confused about the nationaltiy law which allows people who are born dual citizens to remain so with a "duty to endeavor to get rid of" the non-Japanese nationality that is never enforced.
2. Are you confident that you as a Japanese citizen must close a bank account with a jyusho in Japan? This seems mistaken.
3. the wiki explains a good deal about inheritance works, but what confuses me in the way you're right is that you seem to think of the tax only in terms of 1.7 million yen and don't seem to include the value of the property you inherited and are renting out. Both would factor in. Your tax obligation for inheritance is based on a standard deduction related (30 million yen plus 6 million yen per statutory heir). 　(See https://japanfinance.github.io/tax/inheritance/ ).

So in your case, the main question is how much the property you inherited is worth and whether that put your inheritance above the statutory limit.

1. There is no tax on sending your own money to yourself either form Japan to the US or from the US to Japan.
2. There are two ways to deal with Japan/US cross-border tax situations. One is called the Foreign Earned Income Exclusion (FEIE); the other is the Foreign Tax Credit. Inheritance is not earned income and thus the FEIE wouldn't apply. The FTC would apply if you owe both the US and Japan taxes on the inheritance or other types of income. The way it works though is that one country has primary taxation rights and you pay them first; then if the other country is also expecting money, you file for tax credit showing you've paid the first country. If country 2 wants more money than country 1 taxed, you pay only the difference to country 2.
3. I don't know how you will be able to collect rent without a Japanese bank account, but I'm also not convinced that Japanese citizens have to close all bank accounts without a jusho.

 

[glabrousdory4]

@hark Thank you for the detailed information!

Are you saying that without having a residency in Japan (Juminhyo), you don’t have to close your bank account? I know that as a Japanese citizen i can apply for a jyuminhyo as long as i have an address i can tie it to. I think i see the confusion… I forgot to mention that my jyusho is set to my aunt’s house temporarily. i don’t plan to keep my jyusho there for personal reasons. and i wouldn’t be able to set my jyusho as my property i own either with a tenant living there. does that change the circumstances of whether i can maintain my bank account or not?

And based on the standard deduction, it doesn’t look like there would be any inheritance tax in my case. I inherited about 1.7 million yen + my property (after evaluating the value with the kodokushi situation, it’s worth only about 2 million yen). Those numbers look like they won’t even come close to hitting the 30million yen standard deduction.

As far as going about paying taxes, i’m wondering if i should find an accountant to work with in Japan or here in the US? Thoughts?

 

[hark]

@glabrousdory4 a juminhyou is a document from a local government. A jusho is a place of residence in Japan. Obviously you won't have the ability to get a juminhyou if you don't have a jusho (since you need the one to get the other issued).

Foreigners often have to close bank accounts when they leave. Japanese citizens don't necessarily have to do this. See ( https://wise.com/jp/blog/moving-abroad-bank-account ). obviously you need to talk to a bank to set that up and maybe need a representative in Japan depending on which one you use. Maybe your aunt can be the representative?

this sort of thing exists because all sorts of Japanese people leave and have no jusho.

Largely immaterial but if you're a statutory inheritor the standard deduction would be 36 million yen (30 million + 1 * 6 million statutory inheritors).

 

[glabrousdory4]

@hark Yeah, you're right I might be misunderstanding the difference between a jusho and a juminhyo. I think I declared what my jyusho was when I was applying to get my juminhyo. I'm not sure if that was a separate process.

It would be SUPER nice if I could keep my bank account but that Wise article is pretty great. It looks like some banks do allow keeping a bank account when you don't live in Japan. Unfortunately, Shinsei is not one of them. And also I'm not on good terms with my aunt so I can't reliably have them as a representative. I'm trying to see if I can do everything on my own over there.

I wanted to play with the idea of using Wise to manage payments. It looks like you can send money like you normally would with a furikomi to businesses, and I think you can receive money with a kouza bangou that Wise sets you up with?

 

[hark]

@glabrousdory4 I have wise among other accounts but I don't think you can really trust it to function as a normal Japanese bank account.

 

[withlovekar]

@glabrousdory4 Since no one mentioned this, the value of your inherited property is based on the assessed value for property tax and is not concerned with market realities. The value is re-assessed every year and is bundled together with your property tax slips, if you do not have those you'll have to check with your local Houmukyoku, not the town council as they don't have jurisdiction.

Here's a good article (in Japanese) about nationals moving out of Japan. You'll have to file with your current town council for a Kaigai tenshutsu todoke (海外転出届). You'll then be able to cancel your monthly health insurance, pension payments and residence tax.

https://doda.jp/global/guide/kaigaiprocedure.html

If you're not on good terms with your aunt, see if you can find any other relative or a friend to be your tax representative. If not, you can appoint an accountant to do that for you. It's probably more convenient that way, and you can also have them file your taxes from the rental income. You'll probably pay 0 taxes based on how low it is, but you'll still need to file. You can probably make do with a local accountant instead of one that specialises in cross-border affairs so just look on google maps and find someone close to your apartment.

 

[rogueebear]

@hark

Pretty sure no one here is confused about the nationaltiy law which allows people who are born dual citizens to remain so with a "duty to endeavor to get rid of" the non-Japanese nationality that is never enforced.

This doesn’t apply to OP, but Just to point out, Article 16 paragraph 1 of japan’s nationality law can only applies depending on the nationality law of the country/countries (let’s say CountryX)

If countryX allows dual nationality unconditionally, and doesn’t make its national “choose”, such as UK, USA, Canada for example, then Article 16 paragraph 1 can apply after the declaration is of choice is made.

However, if countryX nationality law, requires its dual nationals to choose (like japan), or its nationality law result in loss of nationality when you choose CountryY (like japan… see Article 11 paragraph 2 of Japan’s nationality law), then the individual cannot utilize Article 16 paragraph 1.

So an individual cannot make two declaration of choices. So if a Japan-CountryX dual chooses japan, and the action of choosing japan results in loss of CountryX nationality, as per countryX nationality law, or CountryX requires the national to choose countryX, and the national then proceed to choose country, then it would make the Japan-CountryX dual illegally maintaining dual nationality.

The MOJ kinda outline this here: https://www.moj.go.jp/MINJI/minji78.html in Q19

 

[manishk012]

@glabrousdory4 I don’t see why you’d need to close the bank account. You’re a Japanese citizen, banks don’t ask citizens to close accounts when they leave the country.

If the total inheritance was less than 30M + 6M * number of statutory heirs, then there are no taxes to pay. How much is the apartment valued at?

 

[glabrousdory4]

@manishk012 I replied to @hark but same question: i don’t plan to use my current address because it’s my aunt’s and it was a temporary solution just so i can get a juminhyo to get a bank account. if you cancel your juminhyo doesn’t that result in having to close your bank account?

Also my total inheritance is about 170万+200~900万 for the value of my property. It’s just a small studio apartment. Seems like taxes don’t apply in this situation?