"Japan's inheritance tax is the highest in the world." You often hear this — but is it true? The answer is "the top rate of 55% is among the highest in the world; moreover, because the basic deduction is small so that even 'ordinary households' are taxed, it is quite distinctive globally." On the other hand, looking around the world, 83 of 127 countries have no inheritance tax at all. The United States has a deduction of about ¥2.3 billion and is effectively almost tax-free. This article lines up the major countries in a comparison table and explains Japan's position, right up to "why you cannot escape it by moving abroad."
① Japan's top rate of 55% is among the highest in the world. In the range where the taxable estate is large, the actual burden is also world-class[International comparison (in Japanese)].
② The U.S. federal estate tax has a top rate of 40%, but with a basic deduction of $15 million per person (about ¥2.3 billion; made permanent from 2026), the great majority of Americans owe no inheritance tax.
③ 83 of the world's 127 countries have no inheritance tax (per a Ministry of Economy, Trade and Industry survey). Australia, Canada, Singapore, Hong Kong, Sweden and others abolished it.
④ Japan is distinctive in that its basic deduction is small (from ¥36 million) and it has become a "mass tax" under which roughly 1 in 10 people who die is taxed.
⑤ However, "you can escape it by moving abroad" is naive: unless both the decedent and the heir live outside Japan for more than 10 years, Japan's inheritance tax applies to worldwide assets.
Comparison table of major countries
| Country | Top rate | Guide to the tax-free threshold | Features |
|---|---|---|---|
| Japan | 55% | From ¥36 million (¥30 million + ¥6 million × statutory heirs) | Small deduction and a broad tax base. Spouses are tax-free up to ¥160 million (or the statutory share) |
| South Korea | 50% (for major shareholders, a surcharge brings it effectively up to 60%) | A lump-sum deduction of 500 million won (about ¥55 million), etc. | The second heaviest after Japan. The roughly 12 trillion won inheritance tax of the Samsung founding family is famous. A rate cut and a review of the taxation method are under discussion[JETRO (in Japanese)] |
| France | 45% (direct line) | €100,000 per child (about ¥17 million) | Spouses are completely tax-free. Inheritance by siblings or non-relatives is taxed at even higher rates |
| United Kingdom | 40% (flat) | £325,000 (about ¥63 million) + a home top-up of £175,000 | Spouses are completely tax-free. Gifts made more than 7 years before death are tax-free |
| United States | 40% (federal) | $15 million (about ¥2.3 billion); about ¥4.6 billion for a couple (made permanent from 2026) | An "estate tax" method that taxes the whole estate. In effect, a tax only on the ultra-wealthy. Some states have their own tax |
| Germany | 30% (for a spouse or child) | €500,000 for a spouse; €400,000 for a child (about ¥68 million) | The rate and deduction change greatly depending on the relationship |
| No inheritance tax (83 countries) | — | — | Australia (abolished 1979), Canada (abolished 1972), NZ, Singapore (abolished 2008), Hong Kong (abolished 2006), Sweden (abolished 2004), China, India, and others |
* Yen conversions are rough estimates as of June 2026. Every country has many special provisions depending on the relationship and the type of asset, so the table is a simplified guide.
The "three distinctive points of Japan" seen from the comparison
- (1) A broad tax base (mass taxation): In the U.S., U.K., France, and Germany, because the tax-free threshold is large or spouses are completely tax-free, those taxed are mainly the wealthy. In Japan the basic deduction is small — from ¥36 million — so an owned home plus savings in an urban area exceeds it, and roughly 10% of people who die are taxed (Calculating the basic deduction).
- (2) The height of the top rate: 55% is among the highest of any existing inheritance tax. Along with South Korea's 50% (60% with the surcharge), these two East Asian countries hold the world's highest top rates. The U.S. rate is 40% but with a ¥2.3 billion deduction, so a well-known comparison is that "from around ¥1.1 billion upward, Japan's actual burden is the world's highest"[International comparison (in Japanese)].
- (3) The treatment of spouses: In the U.K. and France, inheritance by a spouse is completely tax-free, but in Japan it is up to ¥160 million (or the statutory share). Although generous enough, it is not "completely tax-free," and a design that considers the second inheritance is required.
Why did "countries with no inheritance tax" abolish it?
- A sense of crisis over the outflow of wealth and talent: In Sweden (abolished 2004), the outflow abroad of the IKEA founder and others triggered the debate. Singapore and Hong Kong abolished it as a national strategy to attract assets. In neighboring South Korea too, on the view that a heavy inheritance tax drives the wealthy to move abroad, a rate cut (a proposal from 50% to 40%) and a shift to an inheritance-acquisition taxation method are being debated[Chester NEWS (in Japanese)][JETRO Seoul (in Japanese)].
- But it is not "free": Instead of an inheritance tax, Canada levies capital gains tax at death by deeming all assets to have been sold at market value (a deemed disposition). Australia too taxes when the heir sells, carrying over the acquisition cost. In many countries "zero inheritance tax = tax-free" is not the case; only the timing and form of taxation differ.
- On the other hand, inheritance tax also has an active role as a "redistribution device that prevents the entrenchment of wealth disparity," and even in abolishing countries, arguments for re-introduction repeatedly arise. Which is right is a question of values, and this article confines itself to a comparison of facts.
Is "if you move abroad, Japan's inheritance tax won't apply" true?
It is largely a misunderstanding. Japan's inheritance tax determines the scope of taxation by residence and nationality, and there are the following hurdles.
- The 10-year rule: If you have Japanese nationality, unless both the decedent (the person who dies) and the heir (the person who receives) have lived outside Japan for more than 10 years, Japan's inheritance tax applies to worldwide assets including overseas assets[National Tax Agency No.4138 (in Japanese)]. It requires a serious move abroad by the whole family for more than 10 years.
- The cost at departure: When you leave Japan holding securities and the like of ¥100 million or more, the exit tax (taxation at the time of departure from Japan) imposes income tax on the unrealized gains.
- Real estate and the like located in Japan is subject to Japan's inheritance tax regardless of who lives where.
The realistic measure is not emigration but the domestic mainstays of lifetime gifts and the correct use of deductions and special provisions (the "hiding" direction, such as nominee deposits and cash stashed at home, is the least worthwhile).
FAQ
Is Japan's inheritance tax really the highest in the world?
The top rate of 55% is among the highest of any existing inheritance tax. Furthermore, because the basic deduction is small and the tax base is broad, in two senses — "the actual burden on high-value assets is the world's highest" and "the share of people taxed is also outstanding among developed countries" — it can be called one of the heaviest in the world.
Do Americans not pay inheritance tax?
The great majority do not. The federal estate tax has a basic deduction of $15 million per person (about ¥2.3 billion; made permanent from 2026), and those taxed are limited to the ultra-wealthy — about 0.1% of all deaths. However, some states have their own estate or inheritance tax.
If I move to a country with no inheritance tax, can I avoid paying Japan's inheritance tax?
It is not simple. If you have Japanese nationality, unless both the person who dies and the person who receives have lived outside Japan for more than 10 years, Japan's inheritance tax applies to worldwide assets. There is also an exit tax at the time of departure, and domestic real estate is always subject to tax.
In countries with no inheritance tax, can you really inherit with zero tax?
It depends on the country. Canada has capital gains tax via a deemed disposition only at death, and Australia taxes when the heir sells. It is not "no inheritance tax = tax-free"; in many countries only the timing of taxation differs, so caution is needed.
Sources of the data
- Japan's scope of taxation (the 10-year rule): National Tax Agency No.4138 When an heir lives in a foreign country (in Japanese) / tax rates: National Tax Agency No.4155 Inheritance tax rates (in Japanese)
- Overview of South Korea's inheritance tax (50% rate, deductions, reform trends): JETRO Seoul Office (February 2026) (in Japanese) / Chester Tax Corporation — Review of the taxation method in South Korea (in Japanese)
- Comparison of major countries' rates and deductions (U.S. $15M made permanent, U.K. £325,000, etc.): International comparison of inheritance tax [2026] (in Japanese) and other explanations of each country's system (as of June 2026)
- 44 countries with an inheritance tax, 83 without (a survey of 127 countries): cited in various materials as a Ministry of Economy, Trade and Industry survey
* Overseas tax systems are an overview as of the time of writing, and there are many revisions and special provisions. For the practice of an international inheritance, always confirm with a professional in both the local country and Japan. This article provides information comparing systems and is not intended to endorse or oppose any particular tax system or to recommend emigration.