Gold (gold bullion, ingots, and gold coins) is taxed completely differently when you "sell" it after it has risen in value and when you "leave it to" or "give it to" your family. A sale gain is taxed as capital gains under comprehensive taxation, and if you have held it for more than 5 years, the amount subject to tax is halved. On the other hand, in an inheritance it becomes inheritance property valued at the market price on the date of death, and leaving it out of the filing invites heavy penalties. This article organizes the taxation mechanism for each of selling, inheriting, and gifting, along with the points that will cost you or catch you out if you don't know them.
Tax on gold is a different thing when you "sell" it versus when you "leave or give" it
| Situation | Tax that applies | Points |
|---|---|---|
| Sold and made a profit | Income tax and residence tax (capital gains) | Comprehensive taxation. Held over 5 years, the taxable amount is halved. There is an annual ¥500,000 special deduction |
| Received through inheritance | Inheritance tax | Valued at the market price on the date of death. Failure to report risks the heavy additional tax |
| Received as a gift during the giver's lifetime | Gift tax | Under calendar-year taxation, up to ¥1,100,000 a year is tax-free |
First, let's look at "selling," which concerns the most people.
A sale gain is taxed as "capital gains" under comprehensive taxation
A profit an individual earns from selling gold bullion held for investment or holding purposes becomes, in principle, capital gains, and is subject to comprehensive taxation combined with other income such as salary and taxed at progressive rates (it is not separate taxation like stocks)[National Tax Agency No.3161].
The acquisition cost is the price when you bought it (including fees). If you don't know the acquisition cost, you can treat 5% of the sale price as the acquisition cost (keep your purchase statements and receipts).
Holding for 5 years is the dividing line (short-term / long-term)
| Category | Holding period | Amount subject to tax |
|---|---|---|
| Short-term capital gains | Within 5 years | The full amount of (transfer gain − ¥500,000 special deduction) |
| Long-term capital gains | Over 5 years | (transfer gain − ¥500,000 special deduction) × 1/2 |
This "amount subject to tax" is added on top of other income such as salary, and is taxed at the rate corresponding to your total taxable income (income tax 5–45% + residence tax 10%).
The ¥500,000 special deduction is an allowance against the total of that year's gold transfer gain and other comprehensively taxed transfer gains (such as golf club memberships). No matter how many times you sell gold, and even if you have other transfer gains, the deduction is up to ¥500,000 a year in total. If you split your sales across multiple years, you can use the ¥500,000 allowance in each of those years.
If you "repeatedly buy and sell for profit," it is not capital gains
If you carry out gold trading continuously for profit-making purposes, it is treated not as capital gains but as miscellaneous income or business income. These do not have the ¥500,000 special deduction or the 1/2 preference. Capital gains apply only when you "sell gold you had been holding as an asset."
A single sale over ¥2,000,000 is known to the tax office
When you sell gold bullion and the like to a dealer and the consideration for a single sale exceeds ¥2,000,000, the dealer submits a "payment record for the consideration of the transfer of gold bullion and the like" to the tax office. It is not the case that "it's cash, so no one will know"; if you don't report it, you will be pointed out later and become subject to the additional tax for underreporting and the delinquency tax. If you make a profit, report it correctly[National Tax Agency No.3161].
Note that a salary earner may not need to file an income tax return if their non-salary income, including the gold transfer gain (after the special deduction), is ¥200,000 or less for the year; but a residence tax declaration may still be required. If you're unsure how to judge, the Guide to filing for side jobs is also a useful reference.
How consumption tax is handled (when an individual sells)
When you buy gold you pay consumption tax, and when you sell it you receive a purchase price with an amount equivalent to consumption tax added on top. When an individual who is not a business sells their own asset, there is no obligation to pay consumption tax, and the amount equivalent to the consumption tax you received effectively remains in your hands. On the other hand, when you "carry on the buying and selling of gold bullion as a business," the question of being a consumption-tax taxable business arises (see Simplified vs. general consumption tax accounting).
Inheritance: gold is inheritance property valued at the "market price on the date of death"
Gold bullion, gold coins, pure-gold accumulation plans, and the like are all subject to inheritance tax. Even if it looks like cash stashed at home, you cannot leave it out of the filing.
If the date of death falls on a weekend or holiday with no published price, use the published price of the nearest date. Purchase prices differ somewhat between dealers, and there is no rule on which dealer's price to use.
| How the gold is held | Approach to inheritance tax valuation |
|---|---|
| Gold bullion and bullion-type gold coins | Purchase price on the date of death × weight |
| Pure-gold accumulation plan | Valued at the balance (market price) as of the date of death |
| Gold ETFs and gold-mining shares | Valued as listed shares, etc. (valued based on the closing price and the like) |
There are dealer records and payment records from when the gold was purchased, and from the use history of a safe-deposit box and the movement of deposits, the holding is identified in a tax audit. Intentionally leaving it out of the filing leads to the heavy burden of the additional tax for heavy weighting (up to 35–40%) plus the delinquency tax. Report gold honestly as inheritance property too.
When you sell inherited gold: you carry over the acquisition cost and acquisition date
When you later sell gold received through inheritance, the acquisition cost and acquisition date used in the capital gains calculation are carried over from the deceased (the decedent). In other words, if the gold was bought by the decedent 10 years ago, when the heir sells it they can use the 1/2 preference as "long-term (over 5 years)."
If you sell property on which you paid inheritance tax within 3 years and 10 months from the day after the start of the inheritance, you can add a certain portion of the inheritance tax you paid to the acquisition cost, lightening the capital gains (i.e., income tax and residence tax) at the time of sale. If you plan to sell inherited gold, check whether you are within this deadline[National Tax Agency No.3267].
Handing it over during your lifetime (a gift)
Handing gold to family during your lifetime is subject to gift tax. Under calendar-year taxation, up to ¥1,100,000 a year is tax-free. For an asset that keeps rising in value, handing it over in planned portions using the tax-free allowance can also be expected to reduce future inheritance tax (for the points to watch in how you do it, see The ¥1,100,000 gift tax exemption).
Practical and tax-saving points worth knowing
- Always keep the documents from when you bought it: if the acquisition cost is unknown, you can only deduct 5% of the sale price, making the tax burden large.
- If you're not in a hurry, sell after 5 years: with a long-term transfer the taxable amount is halved.
- Split the years in which you sell: since you can use the ¥500,000 annual special deduction every year, spreading a large sale over multiple years is one option.
- Consider selling inherited gold within 3 years and 10 months: the special provision adding inheritance tax to the acquisition cost can be used.
- Report honestly in an inheritance: gold is identified. Hiding it invites the additional tax for heavy weighting.
FAQ
Is tax always charged if I sell gold and make a profit?
Tax is charged on what remains after subtracting the ¥500,000 annual special deduction from the transfer gain. If your annual transfer gain on gold and the like is ¥500,000 or less, no taxable income arises within the special deduction. However, a single sale over ¥2,000,000 is identified through a payment record, so if you make a profit, report it correctly.
What is the difference between within 5 years and over 5 years?
When you sell gold held over 5 years (long-term), the amount after the special deduction is further halved, so the taxable amount is cut in half. Within 5 years (short-term) it is not halved, and the tax burden is larger.
How do I calculate for gold whose purchase price is unknown?
If the acquisition cost is unknown, you can treat 5% of the sale price as the acquisition cost. If the actual purchase amount was higher than that, you lose out, so always keep your purchase statements and receipts.
Won't it be found out if I don't report inherited gold?
It is identified in a tax audit from dealer records at the time of purchase, payment records, and the movement of a safe-deposit box and deposits. Intentionally leaving it out makes you subject to the additional tax for heavy weighting. Value it at the market price on the date of death and report it correctly.
What is the holding period when I sell inherited gold?
Since the acquisition date is carried over from the decedent, if the decedent held it over 5 years it is a long-term transfer (1/2) even when the heir sells it. If you paid inheritance tax, you can also use the special provision adding inheritance tax to the acquisition cost by selling within 3 years and 10 months.
Summary
Reference links (sources)
This article is based on the following published materials of the National Tax Agency (neutral, primary sources). Systems and treatments are revised, so please check the latest content before selling or filing.
- National Tax Agency No.3161 Income from the transfer of gold bullion (in Japanese)
- National Tax Agency No.3105 Assets subject to capital gains and the method of taxation (in Japanese)
- National Tax Agency No.3267 Special provision on the acquisition cost when transferring inherited property (in Japanese)
- National Tax Agency No.4105 Property subject to inheritance tax (in Japanese)
* This article is general information, not tax advice. For individual decisions, please confirm with the National Tax Agency, a tax office, or a tax accountant.