When Emperor Akihito yielded his throne, it marked the first abdication by a Japanese emperor since 1817. It could have also been a taxable event had the parliament not amended the nation’s gift tax law.
Items of historical significance that are transferred from an emperor to his successor upon death are exempt from gift and inheritance tax under the Imperial Household Finance Act. There is no provision in the law exempting a transfer upon abdication, however. In Japan, the top rate on gifts to lineal descendants is 55 percent; it kicks in for assets worth at least JPY 45 million (around $404,000).
Akihito, who is 85 and has battled a number of health issues, announced his desire to abdicate the throne in a 2016 address. To shield his heir, Crown Prince Naruhito, from gift tax on the transfer of Japan’s “Three Sacred Treasures” from father to son, the Diet had to pass a law exempting the imperial regalia, according to a May 2 article in the Mainichi Shimbun. The Three Sacred Treasures consist of a sword, a mirror, and a jewel, which, respectively, represent valor, wisdom, and benevolence. The law authorizing the abdication, and exempting the gifts from tax, was passed in June 2017. Akihito stepped down April 30.
In an enthronement ceremony that dates to 690, Shinto priests on May 1 presented the imperial regalia, which are hidden from public view, to the new occupant of the Chrysanthemum Throne. There are no known photographs of the treasures. According to Japanese lore, the sun goddess Amaterasu had her grandson, Ninigi-no-Mikoto, bring the regalia to earth when she sent him to rule Japan. Ninigi was the great-grandfather of Japan’s first emperor, Jimmu, and the imperial regalia are considered emblems of both the emperor’s powers and his divine descent.