Is it true that lifetime gifts are tax-free up to ¥1,100,000 a year?

“Lifetime gifts are tax-free up to ¥1,100,000 a year. So if you give steadily every year, you can move assets to your children and grandchildren with no tax.” Have you seen advice like this on videos or social media?

The figure “¥1,100,000” really does appear in the gift tax rules. But if you believe only the part that says “tax-free if you do it every year,” you may face unexpected tax at the time of inheritance.

We checked this rumor against the original text of the law and the official information published by the National Tax Agency (NTA).

Four tax terms to know first

Here are plain-language explanations of the terms used in this article.

• Gift tax (zōyo-zei) = The tax paid by the person who receives property from an individual.
• Basic deduction (kiso kōjo) = An allowance that you can subtract from the taxable amount when calculating tax. For gift tax, it is ¥1,100,000 per year for each person who receives gifts.
• Deposit in a family member’s name (meigi yokin) = A bank deposit that is in a family member’s name, but where the parent is the one who put in the money and manages it.
• Addition of lifetime gifts (seizen zōyo kasan) = A rule that brings gifts made within a certain period before death back into the estate and charges inheritance tax on them.

Conclusion

Our verdict: “True, with conditions.” The basic deduction is a real system, but if even one condition is missing, “tax-free” does not hold.

The basis for “¥1,100,000” is real

First, let’s look at the basis for “¥1,100,000.” The text of Article 21-5 of the Inheritance Tax Act, which sets the basic deduction for gift tax, reads as follows (e-Gov Law Search).

贈与税については、課税価格から六十万円を控除する。［1］

Reference translation (unofficial): For gift tax, ¥600,000 is deducted from the taxable value.

That is ¥600,000. The current “¥1,100,000” is set by a special provision in a different law, the Act on Special Measures Concerning Taxation (e-Gov Law Search).

平成十三年一月一日以後に贈与により財産を取得した者に係る贈与税については、相続税法第二十一条の五の規定にかかわらず、課税価格から百十万円を控除する。［2］

Reference translation (unofficial): For gift tax on a person who has acquired property by gift on or after January 1, 2001 (Heisei 13), ¥1,100,000 is deducted from the taxable value, notwithstanding the provisions of Article 21-5 of the Inheritance Tax Act.

This provision raises the deduction to ¥1,100,000 for gifts made in 2001 (Heisei 13) and later. The NTA’s Tax Answer No.4408 describes the same content.

贈与税の計算は、まず、その年の1月1日から12月31日までの1年間に贈与によりもらった財産の価額を合計します。続いて、その合計額から基礎控除額110万円を差し引きます。［3］

Reference translation (unofficial): To calculate gift tax, first add up the value of the property received as gifts during the one year from January 1 to December 31 of that year. Next, subtract the basic deduction of ¥1,100,000 from that total.

In other words, under calendar-year taxation (rekinen kazei), the basic rule is that “no gift tax is charged if the total you received in one year is ¥1,100,000 or less.” Up to this point, the rumor holds.

There is, however, a point that is easy to get wrong when counting. The ¥1,100,000 is an allowance for each person who receives gifts. Tax Answer No.4410 explains it.

この場合の暦年課税に係る基礎控除額は、贈与をした人ごとではなく、贈与を受けた人ごとに1年間で110万円となります。［4］

Reference translation (unofficial): In this case, the basic deduction under calendar-year taxation is ¥1,100,000 per year for each person who receives gifts, not for each person who gives them.

For example, suppose that in the same year you receive ¥1,100,000 from your father and ¥1,100,000 from your grandfather. The total is ¥2,200,000. Gift tax is charged on the amount over ¥1,100,000. It is not “¥1,100,000 for each giver.”

Pitfall 1: The gift was never actually made

To use the basic deduction, the gift must first of all be valid in law. A gift is a contract (Civil Code, Article 549, e-Gov Law Search).

贈与は、当事者の一方がある財産を無償で相手方に与える意思を表示し、相手方が受諾をすることによって、その効力を生ずる。［5］

Reference translation (unofficial): A gift takes effect when one party expresses the intention to give certain property to the other party free of charge, and the other party accepts it.

A gift is made only when both the intention to give and the intention to receive exist.

Here you need to be careful about the “deposit in a family member’s name” (meigi yokin). A typical case is a parent who opens an account in a child’s name and puts money into it every year. The child does not know about the account, and the parent manages the passbook and card. In this case, the receiving side’s intention cannot be confirmed. The gift is treated as not having been made. Deposits in a family member’s name are a typical situation in which whether a gift was made is questioned.

The NTA’s pamphlet “How to File an Inheritance Tax Return” answers the question on deposits in family members’ names as follows.

名義にかかわらず、被相続人が取得等のための資金を拠出していたことなどから被相続人の財産と認められるものは相続税の課税対象となります。［6］

Reference translation (unofficial): Regardless of the name, property that is recognized as the property of the decedent, for example because the decedent provided the funds for its acquisition, is subject to inheritance tax.

The NTA’s published “Collection of Commonly Made Errors When Preparing an Inheritance Tax Return” also contains a typical example. It is a case where a time deposit in the son’s name was found after the father’s death.

この定期預金は、父の収入から預け入れたものであり、父が管理・運用をしていました。また、私は過去にこの定期預金について、贈与を受けたことはありません。［7］

Reference translation (unofficial): This time deposit was made from my father’s income, and my father managed and operated it. Also, I have never received this time deposit as a gift in the past.

(Excerpt from the case)

The NTA says that if this time deposit is recognized as the property of the father (the decedent, meaning the person who died) regardless of the name, it is subject to inheritance tax［7］. Even if you thought you were handing over ¥1,100,000 each year, if the facts are the same, the full amount becomes taxable at the time of inheritance.

Pitfall 2: Gifts made before death return to inheritance tax

Even if the gift was properly made, you cannot relax. Calendar-year gifts made within a certain period before death are, in principle, brought back into the estate. This is the system called the addition of lifetime gifts. Let’s look at the text of the law (Inheritance Tax Act, Article 19, e-Gov Law Search).

相続又は遺贈により財産を取得した者が当該相続の開始前七年以内に当該相続に係る被相続人から贈与により財産を取得したことがある場合においては［8］

Reference translation (unofficial): Where a person who has acquired property by inheritance or bequest has acquired property by gift, within seven years before the commencement of that inheritance, from the decedent of that inheritance,

(Excerpt)

The text begins with “within seven years.” This was extended from 3 years in the fiscal 2023 (Reiwa 5) tax reform［9］, and applies to gifts made on or after January 1, 2024 (Reiwa 6). The full 7 years applies to inheritances beginning on or after January 1, 2031 (Reiwa 13). The period is extended in stages. Tax Answer No.4161 explains it.

令和6年1月1日以後の暦年課税に係る贈与により取得した財産については、その加算対象期間が相続開始前7年以内となります。［9］

Reference translation (unofficial): For property acquired by gift under calendar-year taxation on or after January 1, 2024 (Reiwa 6), the addition period is within 7 years before the commencement of the inheritance.

The addition period by date of death (the range of gift dates that are brought back into the estate) is as follows［9］.

As of 2026 (Reiwa 8), the addition period is still within 3 years. It is extended in stages starting with inheritances that begin in 2027 (Reiwa 9), and becomes within 7 years for inheritances that begin in 2031 (Reiwa 13).

Within the addition period, gifts of ¥1,100,000 or less are also brought back.

加算対象期間内に贈与されたものであれば贈与税がかかったかどうかに関係なく加算します。したがって、基礎控除額110万円以下の贈与財産や死亡した年に贈与されている財産の価額も加算することになります。［9］

Reference translation (unofficial): Gifts made within the addition period are added regardless of whether gift tax was charged on them. Therefore, the value of gifted property of ¥1,100,000 or less, which is within the basic deduction, and of property gifted in the year of death are also added.

“No gift tax was charged” does not mean “no inheritance tax will be charged either.” Amounts within the addition period return to the inheritance tax calculation.

Calendar-year gifts are subject to addition for a person who received property by inheritance or bequest (receiving property under a will)［9］. Gifts for which the settlement-at-inheritance taxation system (sōzoku-toki seisan kazei) was chosen are added at the time of inheritance even if the recipient is not an heir［9］.

A grandchild who received only calendar-year gifts during the giver’s lifetime is, in principle, not subject to addition unless the grandchild is an heir. If the grandchild receives property under a will, the gifts are subject to addition.

A grandchild who receives property under a will is also charged a 20% surcharge on the inheritance tax amount. The NTA pamphlet states the following.

相続、遺贈や相続時精算課税に係る贈与によって財産を取得した人が、被相続人の一親等の血族（代襲して相続人となった直系卑属を含みます。）及び配偶者以外の人である場合には、その人の相続税額にその相続税額の２割に相当する金額が加算されます。［6］

Reference translation (unofficial): Where a person who has acquired property by inheritance, bequest, or a gift under settlement-at-inheritance taxation is neither a blood relative in the first degree of the decedent (including a lineal descendant who became an heir by representation) nor the spouse, an amount equal to 20% of that person’s inheritance tax amount is added to that person’s inheritance tax amount.

This is stiff language, so here it is in plain terms. If a person who is neither a first-degree blood relative nor a spouse, such as a grandchild, receives property, that person’s inheritance tax is 20% higher. However, a grandchild who became an heir by representation because the parent died first is treated as a first-degree blood relative, and the 20% surcharge does not apply.

There is also a relief for gifts older than 3 years before death (the 4th to 7th years). It is in the same provision, Article 19 of the Inheritance Tax Act.

加算対象贈与財産のうち当該相続の開始前三年以内に取得した財産以外の財産にあつては、当該財産の価額の合計額から百万円を控除した残額［8］

Reference translation (unofficial): As for property subject to addition that is other than property acquired within three years before the commencement of that inheritance, the remainder after deducting ¥1,000,000 from the total value of that property

(Excerpt)

The same content can be confirmed in the NTA’s explanation.

相続開始の日が令和9年1月2日以後の場合には、加算対象期間内に取得した財産のうち相続開始前3年以内に取得した財産以外の財産については、その財産の贈与時の価額の合計額から総額100万円までは相続税の課税価格に加算されません。［9］

Reference translation (unofficial): Where the inheritance begins on or after January 2, 2027 (Reiwa 9), for property acquired within the addition period other than property acquired within 3 years before the commencement of the inheritance, up to a total of ¥1,000,000 of the total value of that property at the time of the gift is not added to the taxable value for inheritance tax.

For the extended 4 years of gifts, up to a total of ¥1,000,000 is not brought back into inheritance tax. This ¥1,000,000 deduction starts with inheritances beginning on or after January 2, 2027 (Reiwa 9). The full 4 years of gifts from the 4th to the 7th year before death are in place for inheritances beginning on or after January 1, 2031 (Reiwa 13), when the addition period becomes 7 years. At that point, of ¥4,400,000 given as ¥1,100,000 a year, ¥1,000,000 is deducted and ¥3,400,000 is added. The amounts within 3 years before death are added in full, separately.

Pitfall 3: When you promise “I will give every year”

If you promise from the start “I will give ¥1,100,000 every year for 10 years,” a different tax treatment applies. It is treated as a gift of a “right to periodic payments,” and gift tax may be charged in the year of the promise on the value of that right. This is from the Q&A in Tax Answer No.4402.

親から毎年100万円ずつ10年間にわたって贈与を受ける場合には、各年の贈与財産の価額の合計額が110万円の基礎控除額以下ですので、贈与税がかからないことになりますか。［10］

Reference translation (unofficial): If I receive gifts of ¥1,000,000 each year for 10 years from my parent, the total value of the property gifted in each year is not more than the basic deduction of ¥1,100,000, so is no gift tax charged?

The second half of the NTA’s answer is as follows.

ただし、毎年100万円ずつ10年間にわたって贈与を受けることが、贈与者との間で契約（約束）されている場合には、契約（約束）をした年に、定期金給付契約に基づく定期金に関する権利（10年間にわたり100万円ずつの給付を受ける契約に係る権利）の贈与を受けたものとして贈与税がかかります。［10］

Reference translation (unofficial): However, if it has been agreed (promised) with the giver that you will receive ¥1,000,000 each year for 10 years, gift tax is charged in the year of the agreement (promise) on the basis that you received, as a gift, the right to periodic payments under a periodic payment contract (the right under a contract to receive ¥1,000,000 each year for 10 years).

At the moment of the promise, you are regarded as having received, all at once, “the right to receive ¥1,000,000 each year for 10 years” (these are the amounts in the NTA’s example; a promise of ¥1,100,000 each year is treated the same way). Gift tax is calculated on that right. The value of the right is assessed by the method set in Article 24 of the Inheritance Tax Act［11］.

You do not have to give up on “giving every year” itself. The same Tax Answer also says the following.

定期金給付契約に基づくものではなく、毎年贈与契約を結び、それに基づき毎年贈与が行われ、各年の贈与財産の価額の合計額が110万円以下であれば、暦年課税に係る基礎控除額または相続時精算課税に係る基礎控除額以下であるため、贈与税がかかりませんので申告は必要ありません。［10］

Reference translation (unofficial): If, instead of being based on a periodic payment contract, a gift contract is concluded every year, gifts are made every year on that basis, and the total value of the property gifted in each year is ¥1,100,000 or less, then it is not more than the basic deduction under calendar-year taxation or the basic deduction under settlement-at-inheritance taxation, so no gift tax is charged and no filing is required.

If you conclude a new contract each year and give on that basis, you can use the ¥1,100,000 deduction every year. The key point is not to promise the total amount or the number of years in advance.

The difference between Person A and Person B

Let’s compare two fictional people. Both give ¥1,100,000 every year for 10 years, a total of ¥11,000,000.

Person A’s gifts are valid. No gift tax was charged over the 10 years. At inheritance, only the amounts within the addition period before death (now 3 years, up to 7 years in the future) return to the inheritance tax calculation. Amounts from earlier years are not brought back.

In Person B’s case, no gift was made. The same ¥11,000,000 is treated in full as the grandfather’s property. Even though B thought of it as a gift, it is not recognized as one, and the full amount becomes subject to inheritance tax.

The amounts and the number of years are the same, yet the result changes this much depending on how it is done.

What to do

If you plan to make lifetime gifts, check the following points.

• Sign a gift contract every year. A dated contract remains as evidence of both the giver’s and the receiver’s intention.
• Leave a trail of the money. Transfer it from the giver’s account to the receiver’s account. Avoid handing over cash.
• Let the receiver manage and use it. The receiver holds the passbook, card, and seal. Whether it was actually used is also looked at.
• Count back over the addition period. Families likely to face inheritance tax should start giving early, while the giver is healthy. From 2027 (Reiwa 9), the addition is extended in stages up to 7 years.
• Do not promise the total amount in advance. If you decide each year and give each year, it is less likely to be treated as a gift promised as “every year” (a periodic payment contract).

When a gift tax return is required

A gift tax return may also be required. If the total you received in one year exceeds ¥1,100,000, gift tax is charged on the excess. In that case, you must file and pay between February 1 and March 15 of the year after you received the gift［16］.

Another option: settlement-at-inheritance taxation

As a way to give a larger amount at one time, there is also a system called settlement-at-inheritance taxation (sōzoku-toki seisan kazei). You receive gifts within a wide allowance at the time of the gift, and settle them under inheritance tax at the time of inheritance. In principle, you can choose it for gifts from a parent or grandparent who is 60 or older on January 1 of the year of the gift to a child (presumptive heir) or grandchild who is 18 or older on January 1 of the year of receipt［12］. From 2024 (Reiwa 6), this system also has a new annual basic deduction of ¥1,100,000 (Act on Special Measures Concerning Taxation, Article 70-3-2, e-Gov Law Search).

同法第二十一条の十一の二第一項の規定にかかわらず、贈与税の課税価格から百十万円を控除する。［13］

Reference translation (unofficial): Notwithstanding the provisions of Article 21-11-2, paragraph 1 of the same Act, ¥1,100,000 is deducted from the taxable value for gift tax.

(Excerpt. "The same Act" means the Inheritance Tax Act)

To choose it, you must submit a “notification of election of settlement-at-inheritance taxation” to the tax office between February 1 and March 15 of the year after the year of the first gift. The special deduction of ¥25,000,000 can be used only if you file a gift tax return by the deadline［12］.

The calculation at the time of the gift is as follows. Under settlement-at-inheritance taxation, you can subtract a special deduction of up to ¥25,000,000 in total for each giver. Gift tax on the excess is a flat 20%［12］. This ¥1,100,000 is an allowance for each person who receives gifts. When there are two or more specific givers, the ¥1,100,000 is divided among the specific givers in proportion to the value of the property received［4］. Property received under this system is added to the estate and settled at the time of inheritance. For gifts made on or after January 1, 2024 (Reiwa 6), the amount remaining after deducting the ¥1,100,000 basic deduction for each year of receipt is added［12］.

There is also a caution. Once you choose it, you cannot go back.

一度選択すると、その選択に係る贈与者（「特定贈与者」といいます。）から贈与を受ける財産（「相続時精算課税適用財産」といいます。）については、その選択をした年分以降すべてこの制度が適用され、「暦年課税（注）」へ変更することはできません。［12］

Reference translation (unofficial): Once you make the election, this system applies to all property you receive as gifts from the giver to whom the election relates (called the “specific giver”) (called “property subject to settlement-at-inheritance taxation”) from the year of the election onward, and you cannot change to “calendar-year taxation (note).”

In the original text, “(note)” refers to the explanation of calendar-year taxation.

Which is better, calendar-year taxation (the ordinary method that calculates gift tax separately for each year) or settlement-at-inheritance taxation, depends on each family’s situation. If in doubt, consult the tax office’s consultation counter or a licensed tax accountant.

Living and education expenses follow a different system

Money you give to children or grandchildren for living or education whenever it is needed falls under a different system from the ¥1,100,000 deduction (Inheritance Tax Act, Article 21-3, e-Gov Law Search).

扶養義務者相互間において生活費又は教育費に充てるためにした贈与により取得した財産のうち通常必要と認められるもの［14］

Reference translation (unofficial): Property acquired by gifts made between persons with a duty of support for use as living expenses or education expenses, to the extent recognized as normally necessary

(Excerpt)

The value of such property is not included in the taxable value for gift tax［14］. Living expenses and tuition that pass between persons with a duty of support (spouses, parents and children, siblings, and so on) are not subject to gift tax at all, as long as they are within what is recognized as normally necessary.

However, this applies only to money given “each time it is needed.” Tax Answer No.4405 states the following.

したがって、生活費や教育費の名目で贈与を受けた場合であっても、それを預金したり株式や不動産などの買入資金に充てている場合には贈与税がかかることになります。［15］

Reference translation (unofficial): Therefore, even if you receive a gift in the name of living expenses or education expenses, gift tax is charged if you put it into a deposit or use it as funds to buy shares, real estate, and the like.

If you give a lump sum and it goes into deposits or funds to buy real estate and the like, gift tax is charged. Living and education expenses that are recognized as normally necessary are not included in the taxable value for gift tax, and are not subject to the addition of lifetime gifts either［9］［14］.

Summary

“Lifetime gifts are tax-free up to ¥1,100,000 a year” describes a real system. Amounts given before the addition period can reduce your future estate without gift tax. But it is not a case of “give it and you are done.”

No gift tax arises only if the gift is valid (it is not a deposit in a family member’s name) and you did not promise in advance to “give every year.” On top of that, if the time from the gift to death is longer than the addition period (now 3 years, up to 7 years for inheritances beginning on or after 2031 (Reiwa 13)), the gift is not brought back into the inheritance tax calculation. A deposit in a family member’s name is not recognized as a gift and is treated as part of the estate. Before you start, check the method against official information once.

Sources

• ［1］Inheritance Tax Act, Article 21-5 (e-Gov Law Search, Japanese)　Checked: 2026-10-05
• ［2］Act on Special Measures Concerning Taxation, Article 70-2-4 (e-Gov Law Search, Japanese)　Checked: 2026-10-05
• ［3］NTA Tax Answer No.4408 “Calculation of gift tax and tax rates (calendar-year taxation)” (Japanese)　Checked: 2026-10-05
• ［4］NTA Tax Answer No.4410 “When you receive gifts from multiple people” (Japanese)　Checked: 2026-10-05
• ［5］Civil Code, Article 549 (e-Gov Law Search, Japanese)　Checked: 2026-10-05
• ［6］NTA pamphlet “How to File an Inheritance Tax Return (for 2026 (Reiwa 8))” (PDF, Japanese)　Checked: 2026-10-05
• ［7］NTA “Collection of Commonly Made Errors When Preparing an Inheritance Tax Return,” Case 6: Property in a name other than the decedent’s (bank deposits) (PDF, Japanese)　Checked: 2026-10-05
• ［8］Inheritance Tax Act, Article 19 (e-Gov Law Search, Japanese)　Checked: 2026-10-05
• ［9］NTA Tax Answer No.4161 “Addition of gifted property and tax credits (calendar-year taxation)” (Japanese)　Checked: 2026-10-05
• ［10］NTA Tax Answer No.4402 “When gift tax is charged” (Q&A) (Japanese)　Checked: 2026-10-05
• ［11］Inheritance Tax Act, Article 24 (e-Gov Law Search, Japanese)　Checked: 2026-10-05
• ［12］NTA Tax Answer No.4103 “Electing settlement-at-inheritance taxation” (Japanese)　Checked: 2026-10-05
• ［13］Act on Special Measures Concerning Taxation, Article 70-3-2 (e-Gov Law Search, Japanese)　Checked: 2026-10-05
• ［14］Inheritance Tax Act, Article 21-3 (e-Gov Law Search, Japanese)　Checked: 2026-10-05
• ［15］NTA Tax Answer No.4405 “When gift tax is not charged” (Japanese)　Checked: 2026-10-05
• ［16］NTA Tax Answer No.4402 “When gift tax is charged” (main text) (Japanese)　Checked: 2026-10-05
• ［17］NTA Tax Answer No.4152 “Calculation of inheritance tax” (Japanese)　Checked: 2026-10-05

Note: This article is based on laws and official information as of October 5, 2026. It is a translation of the Japanese original; if the two differ, the Japanese version prevails. Quotations from laws and official sources are given in the original Japanese, followed by unofficial reference translations. Sources are limited to laws (e-Gov) and official pages and publications of the NTA, all in Japanese. If a correction is needed after publication, a correction record will be added at the end of this article (Correction policy).