What is gift tax?
Free of charge by gift of others
Acquired property subject to taxation
It is a tax levied on the person who acquires it.
directly or indirectly, free of charge, to another person. 증여세 면제 대상
transfer of tangible or intangible property or interests; 좋은뉴스
By increasing the value of another person’s property,
Excluding bequests and autographs.
[Source: Naver Knowledge Encyclopedia]
In other words, children receive property such as real estate, stocks, and savings from their parents.
If you receive it for free, your children will have to pay gift tax.
However, there are exemption limits and tax rates for these gift taxes.
In a similar way, inheriting an inheritance after death
There is an inheritance tax system.
Giving in life is a gift
What is given after death is inherited
You can separate it by
Gift tax exemption limit
Up to a certain amount depending on the recipient at the time of gift
It is a tax-free policy that exempts you from paying taxes.
<Gift tax exemption limit>
1. In case of receiving a gift from a spouse: 600 million won
2. In case of receiving a gift from a lineal ascendant: 50 million won
(20 million won for minors)
3. In case of receiving a gift from a direct descendant: 50 million won
4. In case of receiving a gift from other relatives: 10 million won
gift from spouse
That is, the husband to the wife
When a wife gives gifts to her husband
Gift tax exemption up to 600 million won.
Gifts from lineal ascendants/lineal descendants
Tax exemption applies up to KRW 50 million.
A direct descendant is related to me by blood.
refers to the vertical relationship between
A person with a higher rank than me
Vulnerable means someone lower than me.
Accordingly, as a direct descendant,
father, mother, grandfather, grandmother,
I have a grandfather and a grandmother
As a direct descendent
I have a son, daughter, grandson and granddaughter.
Not a spouse and lineal ascendant or descendant
gift from relatives
You can be exempted from gift tax up to 10 million won.
Gifts of minors to lineal ascendants and descendents
Tax exemption applies up to KRW 20 million.
However, the exemption period is 10 years.
Duplicate tax benefits within the same period
cannot be received.
In other words, there is no exemption for every number of donations.
The gift tax is calculated on the sum of the 10 years.
For example, if you donate 300 million won to your spouse 7 years ago,
Assuming an additional gift of 500 million won after 7 years
Although the gift amount in each period is less than 600 million won,
Since the gift tax is calculated based on the sum of 10 years,
(300 million + 500 million won) = 800 million won
Gift tax is imposed as much as 200 million won that exceeds 600 million won.
gift tax rate
For the portion exceeding the gift tax exemption limit
You must pay gift tax.
The gift tax rate is the same as the inheritance tax rate.
It looks like this:
A tax rate of 10% is imposed for less than KRW 100 million.
If it is less than 500 million won, a 20% tax rate is imposed.
A progressive deduction of 10 million won is applied.
If it exceeds 3 billion won, a 50% tax rate and
A progressive deduction of KRW 460 million is applied.
Depending on the tax rate determined by the amount section
The progressive deduction amount from the calculated total tax amount
You can do it.
So like
The gift tax calculation formula is complete.
(taxable amount – exemption limit) X tax rate
– Progressive deduction – Reported tax credit (3%)
1) Exclude the gift tax exemption limit from the amount received as a gift.
2) After applying the tax rate for the remaining amount after deduction,
3) If it exceeds 100 million won, the applicable progressive deduction amount is deducted.
4) The 3% applied for voluntary reporting is finally subtracted.
then,
If you donated 100 million won to your grandchildren,
How much gift tax will I have to pay?
– Gift tax exemption limit: KRW 50 million (lineal ascendants and descendents)
– In case of skipping a household: 30% surcharge
※ Not a child gift
In the case of gift skipping generations
30% penalty added
– Progressive deduction: KRW 0 because it is less than KRW 100 million
– Reported tax credit: 3% reduction when reporting voluntarily
1) Gift tax amount – gift tax exemption amount
→ 100 million won – 50 million won = 50 million won
2) 10% tax rate and 0 won progressive deduction for KRW 100 million or less
→ 5 million won
3) In case of skipping a household, a 30% premium tax is applied
→ 5 million won + 1.5 million won
4) 3% deduction for voluntary reporting and payment
→ Deductible amount 195,000 won
5) Final payment of gift tax
→ KRW 6,500,000 – KRW 195,000 = KRW 6,305,000
Gift tax filing deadline
Within 3 months from the last day of the month in which the date of donation falls
You must file and pay gift tax returns.
If real estate is gifted
Acquisition tax must be paid within 60 days.
How to report gift tax
The gift tax return is the gift (recipient)
Submit it to the tax office that has jurisdiction over your address.
declaration documents
1. Gift tax tax base return and voluntary payment invoice
2. Donated property and evaluation statement
3. Documents that can support the debt in case of incurring debt
4. A certificate of family relationship showing the relationship between the donor and the recipient