Gift Tax Between Family in Korea: Deductions, Rates, Filing

What gift tax is and who pays it

In Korea, gift tax is levied on a person who receives property without paying for it. A parent sending cash to a child, transferring a home or shares, or selling something to a child far below market value can all count as a gift. The person who files and pays is not the giver but the recipient. In certain cases set by law, such as when the recipient cannot pay or lives abroad, the giver may share the obligation. The first principle to know is the 10-year total: property received from the same person within ten years is added together, so splitting a gift into several parts does not create fresh deductions each time. A lineal ascendant and their spouse, such as a father and mother, are treated as one person. Transfers between family members are routine and easy to overlook, but as amounts build up, they can all surface at once when, for example, the source of funds is checked when buying a home.

Gift deductions by relationship

Not all of the gift is taxed; a set amount is deducted depending on your relationship with the giver. This is the gift property deduction. Under the Inheritance and Gift Tax Act as of 2026, the deduction is KRW 600 million for gifts from a spouse; KRW 50 million for an adult child and KRW 20 million for a minor receiving from lineal ascendants such as parents or grandparents; KRW 50 million when a lineal descendant gives to a parent; and KRW 10 million from other relatives. Which blood relatives and in-laws count as other relatives is set by law and can be amended, so check the provision in force on the gift date. Each figure is a limit on gifts combined over ten years. For example, if an adult child received KRW 30 million from parents three years ago, only the remaining KRW 20 million can be deducted now. Gifts from non-relatives get no deduction. Deductions used as a minor and as an adult are counted together within the same ten years, so keep a record of dates.

• Spouse: KRW 600 million
• Lineal ascendant to adult child: KRW 50 million / minor: KRW 20 million
• Lineal descendant to parent: KRW 50 million
• Other relatives (blood relatives and in-laws within the legal range): KRW 10 million
• All are 10-year combined limits, as of 2026

The marriage and birth deduction

For gifts made on or after 1 January 2024, an extra KRW 100 million can be deducted from property received from lineal ascendants around a marriage or birth. For marriage, the window is two years before or after the date the marriage is registered; for birth, two years from the child's birth or adoption registration. The marriage and birth deductions share a lifetime limit of KRW 100 million combined, so if you used it all at marriage, nothing more is available at birth. It applies separately from the KRW 50 million basic deduction, so an adult child can receive up to KRW 150 million from parents tax-free. Bride and groom each get their own deduction for gifts from their own parents. If you claim the marriage deduction but do not register the marriage within two years, or the marriage is annulled, filing an amended return within the set period reduces penalty tax. Check the conditions and documents in National Tax Service guidance.

Rate brackets and the calculation steps

Gift tax is the tax base, the gift minus deductions, multiplied by progressive rates. The rates in force as of 2026 are 10% on a tax base up to KRW 100 million, 20% above KRW 100 million up to KRW 500 million, 30% above KRW 500 million up to KRW 1 billion, 40% above KRW 1 billion up to KRW 3 billion, and 50% above KRW 3 billion. Because the rates are progressive, higher rates apply only to the part above each threshold. A proposal to cut rates was put forward but did not pass the National Assembly, so check official guidance for the latest. The steps are: set the value of the gift, add gifts from the same person within ten years, subtract the deduction to get the tax base, then apply the rates. If grandparents skip a generation and give directly to grandchildren, a surcharge is added to the computed tax. Finally, filing on time deducts 3% of the computed tax as a filing credit. Filing late brings penalty tax.

• 1. Determine the value of the gift
• 2. Add gifts from the same person within 10 years
• 3. Subtract the relationship deduction to get the tax base
• 4. Apply progressive rates to get the computed tax
• 5. Deduct 3% if filed on time

A worked example

The following are assumptions that only show the structure. Suppose an adult child receives KRW 100 million from the father and KRW 30 million from the mother in the same year, with no other gifts from the parents in the past ten years. Father and mother count as one person, so the gift totals KRW 130 million. Subtracting the KRW 50 million adult-child deduction leaves a tax base of KRW 80 million, which falls in the bracket up to KRW 100 million, so the computed tax at 10% is KRW 8 million. Filing on time deducts 3%, or KRW 240,000, leaving KRW 7.76 million to pay. If, however, the money was received within two years of registering a marriage and the marriage deduction conditions are met, another KRW 100 million is deducted. Total deductions of KRW 150 million then exceed the KRW 130 million received, so no tax is due. Even with no tax, you need to file to claim the deduction, and that filing becomes evidence when you later explain where the money came from. Recalculate with your own figures.

Common misconceptions

Most misconceptions about family gifts come from assuming deductions and exemptions renew each time. Deductions are ten-year combined limits, not amounts you can reuse every few years. Thinking that cash gifts will go unnoticed is also risky. Large cash transactions can be reported by financial institutions, and when you buy a home, the funding plan and source-of-funds check can look back at past transfers. Another misconception is that all living expenses paid by parents are tax-free. Living and education costs spent as needed are exempt, but money received and then saved, invested or used for a home is a gift. Finally, it is not true that you need not file if no tax is due. Separately from any filing duty, filing leaves a record that explains where the money came from later.

• 'Deductions renew every few years' — they are 10-year combined limits
• 'Cash gifts can't be traced' — they can surface in source-of-funds checks
• 'All living money from parents is exempt' — not if it is saved, invested or used for a home
• 'No tax means no need to file' — the filing record proves the source later

Filing steps and filing on Hometax

The gift tax deadline is three months from the last day of the month in which the gift was made. If you received money on 10 March, for example, you must file and pay by the end of June. You can file yourself on Hometax, the National Tax Service's online portal, or its mobile app, or submit paper forms to your local tax office. For a simple cash gift, entering the giver and recipient, the relationship, the amount and gifts over the past ten years in Hometax's gift tax menu calculates the deduction and tax. For property that needs valuation, such as real estate or unlisted shares, the valuation method can change the tax a great deal, so help from a tax accountant is safer. If the tax is large, you can apply to pay in installments under conditions set by law. After filing, keep the return, transfer records and family relationship documents together.

• Note the date, amount and relationship with the giver
• Check gifts from the same person over the past 10 years
• Check available deductions such as marriage and birth
• File and pay on Hometax within the deadline (3 months from the end of the gift month)
• Keep the return, transfer records and family documents

Common situation 1: paying living, education or wedding costs

The Inheritance and Gift Tax Act exempts from gift tax costs such as living expenses, education and medical bills for dependants that are accepted by social norms. The key is that the money is spent directly for that purpose as the need arises. Parents paying university tuition straight to the school, or covering the living costs of a child with no income as they come up, are generally within the exemption. But sending a large sum at once as living money, which the child then puts into deposits, shares or a home deposit, is treated as a gift. If the child has enough income of their own, parental support for living costs may also be hard to treat as exempt. Ordinary household items needed for a wedding are exempt, but things of high luxury or asset value such as a home or car are different. Wedding cash gifts from guests belong to whoever they were given to. For large amounts, it is safer to look at this together with the marriage deduction.

Common situation 2: borrowing from parents to buy a home

Borrowing from parents is not a gift in itself, but family transactions are easily presumed to be gifts, so you must prove it was a loan. Write a loan agreement setting principal, interest and repayment dates, and keep records of actually repaying interest and principal by bank transfer. An agreement with no repayment records, or an income that could not support repayment, may lead to the loan being treated as a gift. If no interest or low interest is charged, the gap from the appropriate rate set by tax law (4.6% a year as of 2026) can count as a gift, though there is also a threshold below which the gap is not taxed. When buying a home, money borrowed from parents goes into the funding plan, so prepare the agreement and transfer records in advance. Splitting the money into part gift and part loan is possible, but the structure gets complicated, so talk to a tax accountant. How to write a loan agreement is covered in a separate article.

Limits and disclaimer

This article explains the general structure of gift tax between family members under Korea's Inheritance and Gift Tax Act as in force in 2026. Deduction amounts, rate brackets, marriage and birth deduction conditions, the appropriate interest rate and the filing credit rate can change with amendments, and proposals to cut rates and raise deductions have been debated several times. The calculation example is an assumption to show the structure, not an actual tax amount. Property that needs valuation, such as real estate or shares, gifts with assumed debt, generation-skipping gifts to grandchildren and gifts spread over several years can turn out very differently. Before filing, check guidance on Hometax, the National Tax Service's counseling center and the statutes in the Korean Law Information Center, and consult a tax accountant if the amounts are large or the structure complex. This article is not tax or legal advice.