Gift Tax

What documents are needed to issue a transfer report confirmation?

• There are no items like the ‘Housing Fund Gift Deduction’ under the current Gift Tax Law.
• Actual deduction limits under the current Gift Tax Law
• *General Gift Property Deduction
• 1) Adult children: 50 million won (per 10 years)
• 2) Minor children: 20 million won (per 10 years)
• *Additional Deduction Items
• For marriage or childbirth: an additional deduction of 100 million won (lifetime cumulative limit of once)

In 2025, when should family account transfers be reported to the National Tax Service if the amount exceeds what threshold?

• The amount of the 10-year cumulative gift property deduction under the current gift tax law is as follows:
• *Based on the recipient
• For spouses: 600 million won
• For direct ascendants (parents): 50 million won
• For direct descendants (adult children): 50 million won
• For direct descendants (minor children): 20 million won
• For other relatives: 10 million won
• If the amount transferred cumulatively within the last 10 years exceeds the gift property deduction limit, it will be subject to gift tax.

What are the requirements for deduction and the amounts for marriage, childbirth, and gifted property?

• 1. Separate from the existing direct lineal descendant gift property exemption
• 2. When a resident receives a gift from a direct lineal descendant within 2 years before or after the date of marriage, and the gift date is after January 1, 2024
• 3. When a resident receives a gift from a direct lineal descendant within 2 years from the date of a child's birth or adoption, and the gift date is after January 1, 2024
• 4. The total amount received from direct lineal descendants is limited to 100 million won for a lifetime, regardless of first marriage or remarriage

Is a family account transfer a gift?

• 1. Whether there is a support obligation, the financial ability of the recipient, and the purpose of living expenses, education expenses, and gifts are considered tax-exempt.
• 2. Support beyond economic assistance, such as funding for housing purchases or business expenses, is considered a gift.
• 3. Transparency and evidence are key.

What are the disadvantages of undisclosed gifts between family members?

• If such transactions are left unreported, the following penalties may be imposed.
• 1. Late filing penalty (up to 40%)
• 2. Delayed interest
• 3. Penalty for failure to report
• 4. Tax audit (in cases of intentional reporting evasion)