Tokyo, July 3 (Jiji Press)–Trusts targeting people who give donations for the education of their grandchildren or children are proving popular in Japan as a tax break introduced in April exempts such donations from gift tax.
During the three months to June, some 123.5 billion yen was held in trust for such donations at Japan’s three major trust banks and Resona Bank under some 17,900 contracts. Such trusts are created at a faster pace than expected, officials of the banks said.
Lump-sum donations for the education of grandchildren or children, with an upper limit of 15 million yen per person, are exempt from the tax under the measure that is part of fiscal 2013 tax reforms and effective until the end of 2015.
At Mitsubishi UFJ Trust and Banking Corp., a total of 46.8 billion yen was put in those trusts under 6,740 contracts by the end of June. Bank of Tokyo-Mitsubishi UFJ in the same corporate group started to serve as its agent to increase users of the trust.
A total of 41.8 billion yen was entrusted to Sumitomo Mitsui Trust Bank under some 6,200 contracts. Around half of the contracts were struck by new customers, the bank said.