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This time, it was distributed on CONSPIRIT's official channel on YOUTUBE.Episode 47: Boost your quality of life with real estate management!I would like to send you the contents.

The first part isherePlease see here.

This time, I would like to talk about a case of tax evasion in a high-rise apartment building that went to court.

In the first part, we discussed how high-rise condominiums can be a good way to avoid inheritance tax by taking advantage of the discrepancy between current market value and the inheritance tax assessed value.

However, the practice has become so widespread and there have been some extreme cases, leading to lawsuits between heirs and the National Tax Agency.
This Supreme Court ruling was concluded in April of this year, 2022.

The gist of the case is that the deceased died at the age of 94, leaving two heirs.

Approximately three years before the death of the deceased, he purchased a tower apartment in Tokyo for 837 million yen, and around the same time purchased a tower apartment in Kawasaki for 550 million yen.

When this tower apartment was being assessed for inheritance, the roadside value method was used for calculations, and the assessed value of the tower apartment in Tokyo was declared at 200 million yen, and the assessed value of the tower apartment in Kawasaki was declared at 134 million yen.

In addition, loans were initially used to purchase these properties, and because these loans were treated as inherited property, they had the effect of significantly reducing the assessed value, meaning that the estate was ultimately declared to be worth zero inheritance tax.

The heirs claim that they simply carried out the calculations in accordance with the principles.

In response, the National Tax Agency argued that the appraisal should be used rather than the standard valuation method, citing disparity with other taxpayers, and because of "special circumstances."

That is the gist of the trial.

As a result, the NTA's arguments were upheld in the first and second trials and by the Supreme Court.

What this precedent means is that it is acceptable for the inheritance tax assessment of a high-rise condominium to be done not in accordance with the principles, but in a manner other than that instructed by the National Tax Agency.

This precedent may lead to increased scrutiny of tax avoidance using high-rise condominiums, and it may also lead to fewer financial institutions lending a hand to blatant inheritance tax evasion schemes.

At this stage, there have been no overt moves to change valuation methods since the ruling, but in any case, I think that high-rise condominium purchases that are thought to be a way to avoid inheritance tax will be looked at more closely in the future.

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