Are prior gifts included in inheritance tax calculation?

What the Law Says

South Korean inheritance tax law treats certain lifetime gifts as part of the taxable inheritance estate if they were made shortly before death.

Under the Inheritance and Gift Tax Act, any gift received from the deceased within 10 years before their death is added back to the inheritance tax base. This 'add-back rule' prevents tax avoidance through pre-death gifting.

The law applies regardless of whether the gift was reported or taxed at the time — it is automatically included in the heir’s inheritance tax calculation unless specifically exempted.

A basic deduction of ₩20 million applies to the total taxable inheritance (including add-backed gifts), and a separate ₩50 million gift exemption may apply per donor-recipient pair for gifts made more than 10 years before death — but not for those within the 10-year window.

Statutory Text

Gifts received from the deceased within 10 years before the date of death shall be included in the value of inherited property for the purpose of calculating inheritance tax.

— Inheritance and Gift Tax Act, s. 16 — Add-back of Gifts

Statutory Text

The amount of gifts received from the deceased within 10 years before death shall be added to the value of inherited property.

— Inheritance and Gift Tax Act, s. 16(1)

What to Do

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