Let's start with a somewhat extreme scenario. Suppose you bought Bitcoin for ¥1 million (roughly $8,900 at 2017 exchange rates) in 2017 and then passed away. Your heir inherits the Bitcoin and sells it at its current value of ¥10 million (roughly $67,000). What happens?
First, inheritance tax applies. Then, income tax is levied on the difference between the assessed value at the time of inheritance and the sale price. Because this income is classified as "miscellaneous income" and combined with other income under Japan's aggregate taxation (comprehensive taxation) system, high-income earners can face a top combined rate of roughly 55% (income tax plus resident tax). Commentators had pointed out that the combined inheritance tax rate and income/resident tax rate could exceed 100% in some cas...
