You received several million yen in goshugi (wedding cash gifts) at your wedding. Koden (condolence money) was collected at a funeral. Is this money taxable? The answer: as long as it stays within a socially reasonable range, neither gift tax nor income tax applies. However, the treatment changes in cases that exceed common-sense amounts, cases where the money comes from a company, and cases where it is received through business connections. This article organizes the taxation of money at weddings and funerals from both the recipient's and the giver's perspectives.
The basic principle: common-sense gifts and condolence money are tax-free
Congratulatory gifts, condolence money, sympathy money, and the like received from individuals that are recognized as socially reasonable are not subject to gift tax (a treatment based on the provisions of the Inheritance Tax Act). Income tax does not apply either. Even if the goshugi at your wedding totals several million yen, no filing is required as long as the amount from each individual person is within a common-sense range.
What happens if it exceeds the "socially reasonable" range? If an amount is clearly excessive in light of the relationship (for example, several million yen from an acquaintance under the guise of a wedding gift), it may be treated as a gift dressed up as goshugi, and gift tax may be imposed on the portion exceeding the annual JPY 1.10 million basic exemption. There is no clear-cut monetary threshold; the judgment depends on the relationship with the giver and local customs. For details, see the gift tax exemption.
Money around weddings: how far is parental support tax-free?
| Money | Tax treatment |
|---|---|
| Goshugi from guests | Tax-free (within a socially reasonable range) |
| Parents paying for the wedding ceremony and reception | Tax-free. Support that is applied as needed, each time, directly to actual costs — ceremony expenses, furniture and appliances for the new household, etc. — is outside the scope of gift tax |
| Receiving a lump sum of cash from parents "as marriage funds" | Unless it is applied to costs as they arise, it is an ordinary gift. Amounts over JPY 1.10 million per year are subject to gift tax. Note that the tax exemption scheme for lump-sum gifts of marriage and child-rearing funds stopped accepting new applications at the end of March 2025 |
| Wedding congratulatory money from your company | If the amount is socially reasonable, treatment as not taxable as salary is accepted (for the company, it is a welfare expense). Excessive amounts are taxed as salary |
| Who does the goshugi belong to? | In practice, it is sorted out by who bears the ceremony costs and in whose name the invitations were issued. If you move money in large amounts — such as transferring goshugi received in a parent's name into the child's account all at once — keeping records is the safe approach |
For subsidies such as help with pre-marriage health check costs, some municipalities have programs like the bridal check subsidy.
Money around condolences: receiving koden is not taxed, but watch out for return gifts
- Koden is tax-free: Condolence money received by the chief mourner or bereaved family is not subject to gift tax, income tax, or inheritance tax as long as it is within a socially reasonable range. It is not included in the inherited estate either
- Koden-gaeshi (return gifts) do not count as funeral expenses: In calculating inheritance tax, funeral expenses can be deducted from the estate, but the cost of return gifts for koden is excluded (the flip side of koden income being tax-free). On the other hand, food and drink costs for the wake and funeral, and fees for sutra recitation, do qualify
- Condolence payments from a company: The guideline for amounts free of inheritance tax is up to 3 years of ordinary salary for a death in the course of duty, and up to half a year's salary otherwise; any excess is treated as a death retirement allowance (subject to the tax-free allowance of JPY 5 million x the number of statutory heirs)
- For the full picture of post-funeral procedures and money you can receive, see our money roadmap for after a parent passes away
Once business is involved, you enter the world of taxation
- Congratulatory or sympathy money a sole proprietor receives from business partners: Money received in connection with the business is, as a rule, taxed as miscellaneous revenue within business income. The treatment splits depending on whether it is a "personal relationship" or a "business connection"
- The giver's side (business operators): Goshugi and koden given to business partners count as entertainment expenses, and congratulatory or condolence payments to employees count as welfare expenses if they are reasonable amounts based on internal rules for such occasions. The standard practice is to keep copies of the invitation or the funeral acknowledgment card as records (precisely because this is money for which no receipt is issued)
- For gray areas in expenses in general, see also 10 gray-zone expense items
What to do today
What to do today
- If you are getting married: share a family policy that parental support will take the form of "as-needed, direct payment of actual costs" (avoid moving cash in a lump sum)
- Business operators: decide on record-keeping rules for congratulatory and condolence expenses (keeping invitations and funeral acknowledgment cards). For employees, put your rules for such payments in writing
- If you have served as chief mourner: if an inheritance tax return is due, separate the receipts for koden return gifts from the other funeral expense receipts
FAQ
Q. My goshugi totaled JPY 3 million. Do I need to file?
A. If the amount from each individual person is within a socially reasonable range (a common-sense amount for a relative or friend), then even a large total incurs no gift tax or income tax, and no filing is required.
Q. My parents will pay the full wedding cost (JPY 4 million). Is gift tax due?
A. If your parents directly bear the costs of the ceremony and reception, it counts as as-needed support and no gift tax applies. On the other hand, if you are handed a lump sum of cash you can spend freely, it is an ordinary gift and the portion over JPY 1.10 million can be taxable. "As needed, paid directly" is the key phrase.
Q. A lot of koden came in and exceeded the funeral costs. Is the surplus taxed?
A. If the koden is socially reasonable, it is not taxed even if some is left over, and it is not included in the inherited estate. However, the cost of koden return gifts is excluded from the inheritance tax deduction for funeral expenses, so keep those receipts separate.
Q. We are giving an employee JPY 50,000 as a wedding gift. Is withholding as salary required?
A. Congratulatory money of a socially reasonable amount, based on internal rules for such occasions, is accepted as not taxable as salary. The company books it as a welfare expense. Amounts that are excessive relative to the person's position or relationship can become subject to salary taxation.
Reference links (sources)
* This article is general information. Whether something is "socially reasonable" depends on the relationship and local customs. For large amounts, please check with a tax office or a tax accountant.