South KoreaWhat's the difference between gift tax and inheritance tax?
Gift tax applies to assets received as gifts during the donor’s lifetime; inheritance tax applies to assets received after someone’s death. Both are governed by South Korea’s Inheritance and Gift Tax Act.
What the Law Says
South Korea treats gifts and inheritances as separate taxable events under a unified statute—the Inheritance and Gift Tax Act—but with distinct rules, exemptions, and timing requirements.
Gift tax is imposed on property received as a gift while the donor is still alive. It applies regardless of family relationship, though exemptions and rates vary depending on the recipient’s closeness to the donor.
Inheritance tax is imposed on property acquired upon the death of a person (the decedent), including assets transferred via will, intestacy, or life insurance proceeds payable to heirs.
Both taxes use progressive rates ranging from 10% to 50%, but the basic exemption amounts differ: ₩20 million for gifts and ₩50 million for inheritances (as of 2024).
A gift tax return must be filed within six months of receiving the gift; an inheritance tax return must be filed within six months of the date of death.
Statutory TextAny person who acquires property by gift shall pay gift tax in accordance with this Act.
— Inheritance and Gift Tax Act, s. 1 — Purpose and Scope
Statutory TextThe basic deduction for gift tax shall be 20 million won.
— Inheritance and Gift Tax Act, s. 17 — Basic Deduction for Gift Tax
Statutory TextThe basic deduction for inheritance tax shall be 50 million won.
— Inheritance and Gift Tax Act, s. 16 — Basic Deduction for Inheritance Tax
Statutory TextThe taxpayer shall file a tax return within six months from the day following the date on which the gift is made.
— Inheritance and Gift Tax Act, s. 23 — Filing Deadline for Gift Tax
Statutory TextThe taxpayer shall file a tax return within six months from the day following the date of death.
— Inheritance and Gift Tax Act, s. 22 — Filing Deadline for Inheritance Tax
What to Do
Determine whether the transfer occurred during life (gift) or after death (inheritance).
Calculate total value of received assets and apply the appropriate basic deduction (₩20M for gifts, ₩50M for inheritances).
Apply progressive tax rates (10–50%) to the taxable amount.
File the correct return—gift tax return within 6 months of receipt, inheritance tax return within 6 months of death.
Submit supporting documents (e.g., gift agreement, death certificate, asset appraisals) to the National Tax Service.
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.