Inheritance and Gift Tax

Information on the inheritance and gift tax paid by residents in South Korea...

Inheritance Tax

Inheritance tax is paid by individuals and companies who acquire property via a bequest or inheritance. The tax is payable on property bequeathed by a resident of South Korea and on property in South Korea bequeathed by a non-resident. Funeral expenses and the payment of outstanding debts, if the inheritor can prove to have assumed responsibility for them, can be deducted from a bequeathed estate and thus not be taxed. Further deductions are available for dependants, minors, the elderly and the disabled. The tax rate for inheritance tax varies between ten and 50 percent depending on the value of the property inherited.

If a property is inherited, or received as a gift, a tax return must be filed within six months of the last day of the month when the inheritance or gift was received. Full details of any deductions must be included in the return. The government uses this to calculate the taxable value of the inheritance. Notification of the resulting tax bill is given within six months of the tax return being submitted.

Gift Tax

Anyone who receives a property as a gift is required to pay gift tax. This applies to both residents and non-residents of South Korea.

Gift tax is applied at a rate varying from ten to 50 percent depending on the size of the gift. A tax rate of 30 percent is applied to gifts that skip a generation, where a grandchild is the recipient.

The tax is paid by submitting a tax return within three months of the last day of the month in which the gift was received. Deductions are available when the gift is received from a close family member. Full details of any deductions need to be included as these are used by the government to determine the tax due.

Further Information