You received several million yen in goshugi (wedding cash gifts) at your wedding. Koden (condolence money) was collected at a funeral. Is this money taxable? The answer: as long as it stays within a socially reasonable range, neither gift tax nor income tax applies. However, the treatment changes in cases that exceed common-sense amounts, cases where the money comes from a company, and cases where it is received through business connections. This article organizes the taxation of money at weddings and funerals from both the recipient's and the giver's perspectives.
The basic principle: common-sense gifts and condolence money are tax-free
Congratulatory gifts, condolence money, sympathy money, and the like received from individuals that are recognized as socially reasonable are not subject to gift tax (a treatment based on the provisions of the Inheritance Tax Act). Income tax does not apply either. Even if the goshugi at your wedding totals several million yen, no filing is required as long as the amount from each individual person is within a common-sense range.
What happens if it exceeds the "socially reasonable" range? If an amount is clearly excessive in light of the relationship (for example, several million yen from an acquaintance under the guise of a wedding gift), it may be treated as a gift dressed up as goshugi, and gift tax may be imposed on the portion exceeding the annual JPY 1.10 million basic exemption. There is no clear-cut monetary threshold; the judgment depends on the relationship with the giver and local customs. For details, see the gift tax exemption.
Money around weddings: how far is parental support tax-free?
| Money | Tax treatment |
|---|---|
| Goshugi from guests | Tax-free (within a socially reasonable range) |
| Parents paying for the wedding ceremony and reception | Tax-free. Support that is applied as needed, each time, directly to actual costs — ceremony expenses, furniture and appliances for the new household, etc. — is outside the scope of gift tax |
| Receiving a lump sum of cash from parents "as marriage funds" | Unless it is applied to costs as they arise, it is an ordinary gift. Amounts over JPY 1.10 million per year are subject to gift tax. Note that the tax exemption scheme for lump-sum gifts of marriage and child-rearing funds stopped accepting new applications at the end of March 2025 |
| Wedding congratulatory money from your company | If the amount is socially reasonable, treatment as not taxable as salary is accepted (for the company, it is a welfare expense). Excessive amounts are taxed as salary |
| Who does the goshugi belong to? | In practice, it is sorted out by who bears the ceremony costs and in whose name the invitations were issued. If you move money in large amounts — such as transferring goshugi received in a parent's name into the child's account all at once — keeping records is the safe approach |
For subsidies such as help with pre-marriage health check costs, some municipalities have programs like the bridal check subsidy.
Money around condolences: receiving koden is not taxed, but watch out for return gifts
- Koden is tax-free: Condolence money received by the chief mourner or bereaved family is not subject to gift tax, income tax, or inheritance tax as long as it is within a socially reasonable range. It is not included in the inherited estate either
- Koden-gaeshi (return gifts) do not count as funeral expenses: In calculating inheritance tax, funeral expenses can be deducted from the estate, but the cost of return gifts for koden is excluded (the flip side of koden income being tax-free). On the other hand, food and drink costs for the wake and funeral, and fees for sutra recitation, do qualify
- Condolence payments from a company: The guideline for amounts free of inheritance tax is up to 3 years of ordinary salary for a death in the course of duty, and up to half a year's salary otherwise; any excess is treated as a death retirement allowance (subject to the tax-free allowance of JPY 5 million x the number of statutory heirs)
- For the full picture of post-funeral procedures and money you can receive, see our money roadmap for after a parent passes away
Once business is involved, you enter the world of taxation
- Congratulatory or sympathy money a sole proprietor receives from business partners: Money received in connection with the business is, as a rule, taxed as miscellaneous revenue within business income. The treatment splits depending on whether it is a "personal relationship" or a "business connection"
- The giver's side (business operators): Goshugi and koden given to business partners count as entertainment expenses, and congratulatory or condolence payments to employees count as welfare expenses if they are reasonable amounts based on internal rules for such occasions. The standard practice is to keep copies of the invitation or the funeral acknowledgment card as records (precisely because this is money for which no receipt is issued)
- For gray areas in expenses in general, see also 10 gray-zone expense items
Summary
- Wedding gifts and condolence money from individuals are free of both gift tax and income tax if they are within socially accepted amounts. No filing is needed even if the total reaches several million yen.
- If an amount is clearly excessive for the relationship, it is treated as a gift, and gift tax may apply to the portion above the ¥1.1 million annual basic deduction.
- Parents paying wedding costs directly as they arise is tax-free. Receiving a large lump sum of cash is an ordinary gift.
- The cost of return gifts for condolence money is not included in funeral expenses for inheritance tax. Food and drink at the wake and funeral and sutra-reading fees are included.
- Celebration money a sole proprietor receives from business partners is miscellaneous revenue in business income. The giver can expense it as entertainment or welfare costs.
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* This article is general information. Whether something is "socially reasonable" depends on the relationship and local customs. For large amounts, please check with a tax office or a tax accountant.