April 20, 2024

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A view of the Ministry of Economy and Finance at Government Complex Sejong (The Korea Herald)

SEJONG -- The Yoon Suk-yeol administration is considering increasing the amount of wealth that can be given to children tax-free, documents from relevant ministries showed Monday.

Currently, the authority does not levy gift taxes on capital transfers from parents or grandparents as long as they total less than 50 million won ($38,900) per child.

Gift tax of 10-50 percent is applied on gifts exceeding 50 million won -- so with a transfer of 70 million won, 20 million won of that will be subject to gift tax.

The exemption is smaller -- at 20 million won -- if the recipient is aged under 19.

Deputy Prime Minister and Finance Minister Choo Kyung-ho has also called for the burden of both gift and inheritance taxes to be eased. In his written reply to the National Assembly ahead of his recent confirmation hearing, Choo said he would “push for an extension of (tax) deduction range.”

His reply reportedly involves a plan for the Ministry of Economy and Finance to submit a motion to revise the gift and inheritance law during the second half of the year.

In late April, Rep. Yoo Gyeong-joon of the ruling People Power Party proposed a revised bill on gift and inheritance tax, under which the exemptions would be increased to 100 million won for capital transfers to adult children and 50 million won to children aged under 19.

These are the first moves toward revising the regulation since the upper limit for tax deduction was raised from 30 million won in capital transfer to adult children and 15 million won to those aged under 19 in 2014.

Meanwhile, capital transfers between spouses has been left untouched since the limit was raised to 600 million won in 2008, from the previous 300 million won.

By Kim Yon-se (kys@heraldcorp.com)