Japan's Lump-Sum Education Gift Ends March 2026

This is an English translation of our Japanese article. Rules and figures may change; the Japanese version and official sources are authoritative.

Last updated: June 11, 2026 / The system details in this article are based on information published by the National Tax Agency and others, and on the content of the FY2026 (Reiwa 8) tax reform (as of June 2026).

The "lump-sum gift for education expenses," which let grandparents give a grandchild up to ¥15 million tax-free for education costs in one go, stopped accepting new applications on March 31, 2026 (Reiwa 8) under the FY2026 tax reform. "So there's no tax-free way to help with a grandchild's tuition anymore?" No — there is. In fact, "education expenses paid as and when needed" were never subject to gift tax in the first place. This article organizes what ended, how existing contracts are treated, and three alternative measures you can still use today.

Key points on the end of the system and the alternatives

① The lump-sum gift for education expenses (¥15 million tax-free) stopped accepting new applications on March 31, 2026. Amounts contracted before then can still be used tax-free[NTA No.4510].
② Alternative 1: Help with education and living expenses "as and when needed" was never taxable (between persons with a support obligation; e.g., paying an entrance fee directly)[NTA No.4405].
③ Alternative 2: the ¥1.1 million basic deduction for annual (calendar-year) gifts / the ¥1.1 million annual deduction under the settlement-at-inheritance taxation system.
④ Alternative 3: The lump-sum gift for marriage and child-rearing funds (¥10 million) continues until March 31, 2027 (Reiwa 9).
⑤ For most families, the end of the lump-sum gift does little real harm. That is because "paying as and when needed" can keep things fully tax-free.

Gift and inheritance planning

What ended? (A recap of the system)

The lump-sum gift for education expenses was a system in which a lineal ascendant such as a grandparent opened an education-fund account at a financial institution and could gift, in one go, up to ¥15 million per recipient tax-free (up to ¥5 million for payments to entities other than schools)[NTA No.4510]. It began in 2013 and was extended repeatedly, but the FY2026 tax reform did not extend it, and it stopped accepting new applications with contracts made on March 31, 2026.

Amounts already contracted: can still be withdrawn tax-free (procedures such as submitting receipts remain the same as before).
The existing cautions also continue: gift tax applies to any balance remaining when the recipient turns 30, and inheritance tax on the balance if the giver dies during the contract (in certain cases) — a design where "not using it up works against you."

Alternative 1: Help "as and when needed" is still tax-free (the most important)

It is surprisingly little known, but help with education and living expenses from a person with a support obligation (a parent or grandparent) is not subject to gift tax, regardless of the amount, as long as it is "to be applied directly, as and when needed"[NTA No.4405].

OK example: grandparents wire an entrance fee or tuition directly to the school / help with monthly rent for lodging / buy a school backpack or teaching materials as and when needed
NG example: handing over several million yen to an account in one go "for future tuition" (not as-and-when-needed, so an ordinary gift) → the portion diverted into savings or investments is also taxable
The trick is to keep transfer records and receipts so you can show it was "as needed, at actual cost."

In other words, as long as you pay a grandchild's tuition as and when needed, the end of the lump-sum gift does almost no real harm. The lump-sum gift's true use case was when "inheritance is near and you want to move a lump of assets ahead of time."

Alternative 2: The ¥1.1 million calendar-year gift / settlement-at-inheritance taxation

Calendar-year gift: within the ¥1.1 million annual basic deduction, no filing is needed and it is tax-free (How to use the gift-tax exemption; it also explains how to avoid being deemed a recurring gift). Watch out for the add-back of gifts made within 7 years before the start of inheritance.
Settlement-at-inheritance taxation: from 2024 a new ¥1.1 million annual basic deduction was created, and at ¥1.1 million or less no filing is needed and there is no add-back. It is a strong option for moving assets systematically from an elderly giver.
As-and-when-needed help with education expenses (tax-free) and the ¥1.1 million gift can be used together.

Alternative 3: The lump-sum gift for marriage and child-rearing funds (until March 2027)

Among the similar systems, the lump-sum gift for marriage and child-rearing funds (up to ¥10 million per recipient, of which up to ¥3 million for marriage costs) is available until March 31, 2027 (Reiwa 9)[NTA No.4511]. It targets children and grandchildren aged 18 to 49 and can be used for wedding ceremonies, fertility treatment, childbirth, childcare fees, and the like. However, this too involves taxation on any unused portion and procedural effort, so as a rule you should first consider whether "tax-free as-and-when-needed help" is enough.

FAQ

Is paying for cram-school or lesson fees also tax-free?

Within the range recognized as ordinarily necessary for education, and as something applied directly as and when needed, it is treated as tax-free. Paying the fees as and when they arise is normally no problem. Avoid handing over a lump sum whose use becomes unrestricted.

Summary

The lump-sum gift for education expenses (¥15,000,000 tax-free) closed to new contracts on March 31, 2026, but existing contracts can still be drawn down tax-free.
Parents or grandparents paying entrance fees or tuition directly as needed owe no gift tax, regardless of the amount.
Transferring a lump sum to an account for future tuition is an ordinary gift, so keep transfer records and receipts.
It can be combined with the ¥1,100,000 calendar-year gift exemption or the ¥1,100,000 annual deduction under the inheritance-time settlement taxation system.
The lump-sum gift for marriage and child-rearing funds (¥10,000,000) remains available until March 31, 2027 (Reiwa 9).

Sources

Lump-sum gift for education expenses (¥15 million; application deadline March 31, Reiwa 8): NTA No.4510 (in Japanese)
Living and education expenses from a person with a support obligation (tax-free if as-and-when-needed and direct): NTA No.4405 Cases where gift tax does not apply (in Japanese)
Lump-sum gift for marriage and child-rearing funds (¥10 million; until March 31, Reiwa 9): NTA No.4511 (in Japanese)

* The ending and extension of systems change with tax reform. This article is general information; please confirm the design of specific gifts and inheritances with a tax accountant.