Most gifts received free of charge from others incur gift tax. The gift tax exemption method is that the amount I received is subject to gift tax exemption. Eligible people do not pay gift tax and can save tax.
Gift tax exemption and method
The standard of gift tax occurs when someone else’s property is increased. However, as a special example, we are reducing taxes or providing tax-free benefits. Only those who are clearly included in the regulations set by the state are exempt from gift tax, and if not applicable, they must pay tax on gifted property. The gift tax exemption method is as follows. 증여세 면제 대상
Relatives within 4th degree of relationship property deduction 좋은뉴스
Non-taxable gift property
In case of debt
Return within the gift tax reporting period
tax not included
There are special cases where property gifted by in-laws is deductible. In the case of gifting to a spouse, lineal ascendant, lineal descendant, or other 6th degree, the amount less than the maximum amount is deducted from the provided property. If property is gifted from a relative within 4 degrees within 10 years, the gift tax is exempted according to the combined amount. However, in the case of a spouse, it means a person in a marital relationship under civil law, and does not apply to a person in a de facto marriage relationship.
Spouse 600 million won
50 million won for direct descendants (20 million won for minors)
50 million won for direct descendants
Other relatives (blood relatives within 6th degree and relatives within 4th degree) 10 million won
There are gifted properties that are tax-exempt. This is specifically defined in four ways. The first is a gift from the state or a local government, the second is a gift from a political party in accordance with the provisions of the Political Party Act, and the third is a gift for victims of disaster relief, medical expenses, living expenses and educational expenses for dependents. The fourth is about the disability welfare law or insurance money for national merit. In general, the most applicable non-taxable gift property is the third clause, a conventionally accepted gift. We have listed those below.
Student loans or scholarships, etc.
Souvenirs, congratulatory money, gift money, etc.
coma supplies
Goods less than 1 million won received from a foreigner
Less than 5/100 of the acquisition price or less than 10/100 of the rental amount among the amount donated from employee welfare funds and joint labor welfare funds for a homeless person to acquire or lease a house with a total area of 85 square meters (25 pyeong) or less
If there is debt, gift tax is levied excluding the debt portion of the gift portion. In the case of gift tax, tax is paid based on what is received free of charge, but property with debt is not received free of charge, but is subject to the condition of repaying debt, that is, transfer for a fee.
If you return the gift property, it seems that everyone will be subject to gift tax exemption, but that is not the case. There is a period of 3 months from the date the gift was received to report the gift, and if the property is returned within this period, the gift tax is exempted. However, it is important to note that some or all gift tax will be incurred after the reporting period has elapsed.
Excluding taxable amount means that bondi gift tax should be added, but tax is not calculated and imposed. In general, in the way that public service corporations that we know a lot can do, property contributed by public service corporations is not calculated in the taxable amount. However, a lot of tax evasion is made with this provision, and if it is discovered, gift tax will be added again. Or when the disabled person receives the amount (less than 500 million won) entrusted to the trust company. This applies when the trust period is set until death and all beneficiaries are disabled.
Report and deadline
If you do not fall under the gift tax exemption targets that were previously announced, you are subject to gift tax. You must check the subject and method of gift tax exemption and voluntarily report the gift tax within the deadline. The deadline for reporting is within 3 months from the date on which the gift was certified. The gift tax rate varies depending on the amount received as a gift, and progressive deductions are additionally applied. In particular, if you receive an additional benefit of 3% reduction of the calculated tax amount when reporting voluntarily, you can receive help in reducing some of the gift tax, although it is not tax exempt.
Tax base tax rate Progressive deduction
10% below KRW 100 million –
More than 100 million won and less than 500 million won 20% 10 million won
More than 500 million won and less than 1 billion won 30% 60 million won
More than 100 million won and less than 3 billion won 40% 160 million won
Over 3 billion won 50% 450 million won
There is no way to exempt from gift tax except for cases that are subject to gift tax exemption. However, you can avoid paying taxes by not voluntarily reporting. However, if the tax office finds that the tax has not been paid for an unfair reason through a tax investigation, additional tax will be paid, so it is recommended to check the gift tax.