Japanese Gov’t Mulls Over Radical Change To Inheritance Tax Policy
By: Ainsley Brown
In a move to boost its faltering economy, the Japanese government is considering a radical alteration of its inheritance tax regime. The policy, if implemented and if it has the desired effect, could see trillions of yen being transferred from elderly savings conscious Japanese to their more free-spending children or grandchildren.
The policy basically boils down to having people pass on their money now rather than bequeath it in a will. The government then in turn believes that with this new ‘glut’ of cash, younger Japanese being less saving conscious than their elders will open their wallets giving the economy a much needed boost.
According to the Times, the governing Democratic Party of Japan led by Yukio Hatoyama will announce the new policy in its manifesto to be published next month. The policy change would see a significant rise in the inheritance tax being accompanied by the slashing of the gift tax by about half. In making it much cheaper for people to gift inheritances rather than by bequeath, the government hopes this will be sufficient enticement for the elders to give up their cash now. And secondly, with their new found wealth the younger Japanese will give domestic consumer spending and thus the economy a well needed boost.
Will it work? We shall see.
