Gifts Over 5 Billion Won Increase 80% in 2 Years... More Gifts Than Inheritance, More to Grandchildren Than Children

[Asia Economy Reporter Kwangho Lee] Cases of gifting assets worth more than 5 billion won have increased by 80% over the past two years.

According to the gift tax decision status data submitted by the National Tax Service to Ki Dongmin, a member of the National Assembly's Planning and Finance Committee from the Democratic Party of Korea, the number of gift tax decisions in 2018 was 160,421, a 28.5% increase from 124,876 cases in 2016. The total decided tax amount surged by 50.7%, from 3.5282 trillion won to 5.3176 trillion won.

The amount increased significantly compared to the number of gift tax decisions because high-value gifts increased substantially. For example, the number of gift cases exceeding 5 billion won rose by 79.6%, from 412 cases in 2016 to 740 cases in 2018. During the same period, the related gift tax decided amount increased by 65.8%, from 1.0165 trillion won to 1.6851 trillion won.

When dividing the gift asset value into brackets of 10 million won, 50 million won, 100 million won, 300 million won, 500 million won, 1 billion won, 2 billion won, 3 billion won, 5 billion won, and over 5 billion won, the over 5 billion won bracket showed the highest growth rate in both the number of cases and the decided tax amount.

The gift asset value is the sum of the gift amount for that year plus any gift amounts of 10 million won or more received from the same person within 10 years. The increase in gift tax contrasts with inheritance tax trends.

In 2018, the number of inheritance tax decisions was 8,002, only an 8.2% increase from 7,393 in 2016. During the same period, the decided tax amount rose by 11.7%, from 2.2561 trillion won to 2.5197 trillion won.

As a result, gifts to minors have also increased. The total asset value gifted to minors rose by 83.7%, from 684.8 billion won in 2016 to 1.2579 trillion won in 2018, and the related gift tax surged by 117.9%, from 125.4 billion won to 273.2 billion won. Notably, in 2018, more than half of the total gift tax decided amount for minors in the Seoul area, 111.6 billion won out of 188.6 billion won, came from the Gangnam 3 districts.

Representative Ki said, "It is clear that wealthy individuals are choosing gifting over inheritance as a tax-saving method, and preferring to gift to grandchildren rather than children," adding, "It is necessary to thoroughly verify whether there have been any cases of illegal gifting or tax evasion involving minors who have no income."

This content was produced with the assistance of AI translation services.