October 26, 2017 12:50
Koreans inherited an average of W60 trillion a year over the last nine years, but thanks to lenient deductions 98.1 percent of inheritance taxes are waived (US$1=W1,129).
More worryingly, 54.9 percent of gift taxes, which are often levied on disguised inheritances, were also waived, according to National Tax Service data obtained by Minjoo Party lawmaker Park Kwang-on.
Koreans inherited W251.6 trillion from 2008 to 2016, and another W281.9 trillion worth of assets were transferred from one family member to another as gifts over the same period. That amounts to a total of W533.4 trillion.
Over the last nine years, some 2.74 million people inherited assets, but inheritance tax was waived in 98.1 percent of the cases. An NTS official said, "There are various deduction benefits so inheritance tax is rarely paid."
There is a basic deduction of W200 million, and at least W500 million in deductions for surviving spouses, plus additional tax exemptions for children.
Over the same period, 2.02 million people received assets from family members as gifts, and 1.16 million of them were exempt from gift taxes thanks to various deductions. Transfers of up to W600 million in assets from spouses are exempt, and children who receive less than W50 million in assets over a 10 year period are also exempt.
Park said, "The existing laws are rational, but we need to look at how the regulations are applied to people who inherit huge sums or children who receive assets as gifts, and make revisions if necessary."
Half of the inheritances and gift transfers were real estate. Some 65.9 percent of inherited assets and 48.8 percent of assets transferred as gifts were land or buildings, followed by financial assets (17.2 percent) and stocks (11.3 percent).
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