This is an English translation of our Japanese article. The Japanese version and the documents published by Japan's Financial Services Agency are authoritative. Everything here is a request, not settled law. Whether any of it happens is decided by the ruling party's tax reform outline in December and the legislation that follows.
Last updated: 1 September 2026. Based on the Financial Services Agency's "FY2027 (Reiwa 9) tax reform requests", published 31 August 2026.
The short answer. On 31 August 2026 the FSA published its tax reform requests for FY2027. Three matter to households. First, letting the NISA lifetime allowance of 18 million yen refill within the same year you sell — today you wait until January. Second, making permanent the extra 20,000 yen of life insurance premium deduction for households with a dependent under 23, currently a two-year measure. Third, extending loss offsetting to derivatives and deposits. This article works through what was asked for, and when it gets decided.
Three pillars, plus a long tail
Every ministry files its requests with the Ministry of Finance by the end of August. The FSA organised its FY2027 requests under three headings.
| Pillar | Request | Filed jointly with |
|---|---|---|
| 1. Building an asset management nation | Improving the usability of NISA | — |
| Special treatment for bank investment subsidiaries investing in SMEs | METI | |
| Unifying financial income taxation (wider loss offsetting) | METI, MAFF | |
| 2. Support for households raising children | Making the life insurance premium deduction expansion permanent | MAFF, MHLW, METI |
| 3. Promoting financial innovation | Measures for trust-type stablecoins | — |
NISA: the allowance would refill in the same year
NISA carries a lifetime tax-free holding allowance of 18 million yen at book value. Sell a holding and that book value frees up again — but only from the following January. You cannot reuse it in the year you sold.
The annual limit is 1.2 million yen for the accumulation quota plus 2.4 million yen for the growth quota. Even if the request succeeds, that 3.6 million yen ceiling does not move. Only the timing of reuse changes.
This is not a new ask. The FSA document marks it a continuing request — it has been filed before and has not been adopted. The agency argues that although annual investment could only fall to 3.6 million yen or less from Reiwa 11 onwards, the change is needed this year to give investors predictability and to leave financial institutions enough time for systems work. Pre-empting the "why the hurry" question suggests how hard the item is to pass.
Tidying up which funds qualify
The FSA also asks for the eligibility rules of the accumulation quota to be completed. Today, ETFs that do not track a designated index have no defined criteria and so are excluded. The agency wants criteria set for which ETFs should qualify, given how the ETF market has matured.
Life insurance: making the 20,000 yen top-up permanent
Households with a dependent under 23 currently get the general life insurance premium deduction limit raised from 40,000 to 60,000 yen for income tax. That is a temporary measure limited to the 2026 and 2027 tax years. The FSA asks for it to be made permanent.
| Deduction | Income tax limit | Resident tax limit |
|---|---|---|
| General life insurance (with a dependent under 23) | 60,000 yen (40,000 + 20,000) | 28,000 yen |
| Nursing care and medical insurance | 40,000 yen | 28,000 yen |
| Private pension insurance | 40,000 yen | 28,000 yen |
| Combined limit | 120,000 yen | 70,000 yen |
One easy thing to miss. The document states explicitly that single-premium life insurance is excluded from this top-up. Policies paid for in one lump sum do not qualify.
Note that 20,000 yen is the deduction, not the refund. It reduces taxable income, so the tax saved is 20,000 yen multiplied by your rate — roughly 2,000 yen a year at a 10% income tax rate.
Financial income: offsetting losses against derivatives and deposits
Losses can currently be offset only among listed shares, public equity funds and certain bonds. The FSA wants that widened to derivatives and deposits.
| Instrument | Income | Capital gain or loss |
|---|---|---|
| Listed shares, public equity funds | Separate filing | Separate filing |
| Specified bonds, public bond funds | Separate filing (since Jan 2016) | Separate filing (since Jan 2016) |
| Derivatives | Separate filing (cannot be offset) | |
| Deposits | Withholding (cannot be offset) | — |
This one is not straightforward. The FY2026 ruling party outline went only as far as saying derivatives would be "considered comprehensively" in light of work on preventing deliberate tax avoidance — that is, the avoidance concern is unresolved.
Items in the long tail that reach households
| Item | Direction |
|---|---|
| Raising the inheritance tax exemption for death benefits | Tax cut |
| Reviewing inheritance tax on listed shares | Review |
| Measures on the acquisition-cost add-back for inherited assets | Review |
| Measures following Civil Code reform of wills (led by the MOJ) | Technical |
| Abolishing the gift tax exemption for lump-sum marriage and childcare funds (led by the CFA) | Abolition |
The exemption for death benefits is currently 5 million yen multiplied by the number of statutory heirs; raising that is on the list.
The striking one is abolition of the lump-sum marriage and childcare gift exemption — up to 10 million yen tax-free for recipients aged 18 to under 50, expiring 31 March 2027. The request is not to extend it but to let it end. In a list where almost every item asks for a tax cut, a request that increases the burden stands out.
How far do requests actually get?
All of the above are requests. They are debated through the autumn, decided in the ruling party's tax reform outline in December, and only then legislated in the ordinary Diet session.
What happens next
End of August 2026 … ministries file requests (we are here)
Autumn 2026 … ruling party tax commission debates
December 2026 … the outline decides what is adopted
2027 ordinary Diet session … legislation
Requests often do not survive intact. The NISA same-year refill is explicitly a continuing request that has already failed once. Seeing a headline that "the FSA has requested X" is not the same as X happening.
Do not act this year on the assumption a request will pass. Selling now because the allowance "will" refill next year risks leaving a year of allowance idle if it does not. For almost every item here, waiting for December costs nothing.
What to do today
- Put the December outline in your calendar. That is when these are decided; checking the coverage then is enough.
- If you have a child under 23, claim the life insurance top-up in this year's year-end adjustment. Whether it becomes permanent is undecided, but it applies for 2026 and 2027 regardless.
- If you are considering the lump-sum marriage and childcare gift, note the 31 March 2027 deadline. Abolition, not extension, is what has been requested.
Frequently asked questions
Will the NISA allowance really refill in the same year from next year?
That is not decided. It is a request from the FSA to the Ministry of Finance, and the document marks it as a continuing request that has been filed before without being adopted. It is decided in the ruling party's tax reform outline in December 2026 and would take legislation after that.
If it passes, does the 3.6 million yen annual limit go up too?
No. The request is to let the lifetime allowance refill within the same year you sell. It does not raise the annual limit of 1.2 million yen for the accumulation quota plus 2.4 million yen for the growth quota. Any refilled allowance is still usable only within that annual limit.
Can I use the 20,000 yen life insurance top-up now?
Yes. With a dependent under 23, the general life insurance premium deduction limit rises from 40,000 to 60,000 yen for income tax. It is a temporary measure for the 2026 and 2027 tax years, and the FSA has requested that it be made permanent. Single-premium life insurance is excluded from the top-up.
Does the 20,000 yen mean 20,000 yen less tax?
No. It is an income deduction, so taxable income falls by 20,000 yen. The tax actually saved is 20,000 yen multiplied by your rate — roughly 2,000 yen a year at a 10% income tax rate. The resident tax limit of 28,000 yen is unchanged.
Until when can the lump-sum marriage and childcare gift be used?
The current deadline is 31 March 2027. This year's requests list abolition rather than extension (led by the Children and Families Agency), so it is heading for expiry. It allows recipients aged 18 to under 50 to receive up to 10 million yen from a direct ascendant free of gift tax.
Sources
This article summarises published tax reform requests. It does not describe settled law. Adoption is decided by the ruling party's tax reform outline and subsequent legislation. For individual investment or tax decisions, consult your financial institution, tax office or a licensed tax accountant.