contents
1. Inheritance Tax
a. Taxpayer
	(1) A person or a company that acquires property through inheritance or bequest is
		liable to the Inheritance Tax.
	(2) An inheritor that is a for-profit company is exempt from the Inheritance Tax.
b. Tax base
	(1)   From the date of the commencement of the inheritance, the following are deemed
		taxable inheritance or bequest:
		(a) bequeathed property;
		(b) donated property transferred upon the death of the bequeathed;
		(c) property donated to the inheritor within ten years of the date of the
			commencement of the inheritance; or
		(d) property donated to legal persons other than the inheritor within  five years of the
			date of the commencement of the inheritance.
	(2) The inheritance tax covers:
		(a)  all property bequeathed by a resident; and
		(b)  all property in Korea bequeathed by a non-resident.
c. Deductions
	(1) Public imposts
	(2) Funeral expenses between 5 million and 10 million won (with an additional deduction
		of 5 million won if usage fees of burial chamber arise)
	(3) Debts left by the bequeathed of the inheritance or legacy for which the inheritor is
		able to prove that he or she is to assume the responsibility to pay upon the
		commencement of the inheritance
d. Itemized Deductions
	(1) Basic deduction
			General: 200 million won
	(2) Additional deductions
		Inherited family businesses: up to 100 million won
		Inherited farms, fisheries, and forestry: up to 200 million won
	(3) Deductions for dependents
			30 million won per person
	(4) Deductions for minors
		Where the inheritor or legatee, or a family member of the inheritor or legatee is a
		minor, an annual deduction of 5 million won is granted to the minor until he or she
		becomes 20 years old. There is no limitation on the number of deductions granted to
		one family.
	(5) Deductions for the elderly
		Where the inheritor or legatee, or a member of the inheritor or legatee's family is over
		60 years old, a deduction of 30 million won is granted to that person (not applicable
		to inheritor or legatee's spouse). There is no limitation on the number of deductions
		granted to one family.
	(6) Deductions for the disabled
		In the case where the inheritor or legatee, the spouse of the inheritor or the legatee,
		or a member of the family of the inheritor or legatee is disabled, an annual deduction
		of 5 million won is granted to that person until he or she becomes 75 years old.
		There is no limitation on the number of deductions granted to one family.
e. Lump-Sum Deductions
	(1) The taxpayer has the option to select itemized deductions (excluding additional
		deductions) or a lump-sum deduction.
	(2) Lump-sum deduction
			General: 500 million won
f. Deductions for Spouse
	Where the bequeathed is a resident, the actual amount inherited by his spouse is
	deductible. This deduction is allowed for amounts that fall within the range of 500 million
	won to 3 billion won. If the amount inherited is less than 500 million won, the entire
	amount is tax deductible.
g. Deductions for Financial Assets
	Where net financial assets are a part of the inheritance, the following amounts are
	allowed as deductions.
	(a) For amounts less than 20 million won, the total amount of the inherited net financial
		assets (financial assets - financial debt)
	(b) For net amounts that fall within the range of 20 million won and 100 million won, 20
		million won
	(c) For net amounts that exceed 100 million won, 20% of the total inherited financial
		assets (However, only deductions up to 200 million won are allowed.)
h. Deductions for Losses
	Deductions for Losses Incurred as a Result of Natural Disasters and Other
	Unforeseeable Circumstances  => Deductions are allowed for fires, collapse of buildings,
	explosions, environmental pollution, natural disasters, etc., which affect the inherited
	property. They are allowed for an amount equivalent to that of the loss incurred.
i. Tax Rate
									(Unit : million Won)
			tax base					tax rates
		over		not more than			tax amount	tax rate	of an amount exceeding … Won
				100				10%
		100		500			10	20%	100
		500		1000			90	30%	500
		1000		3000			240	40%	1000
		3000					1040	50%	3000
	ex: for tax base of 2,000,000,000
		=> 240,000,000 + (2,000,000,000 - 1,000,000,000) * 40% =
		=	640,000,000  (effective rate = 640,000,000 / 2,000,000,000 = 32%)
j. Inheritance Tax for Bequests that Skip a Generation
	Where one designates a grandchild as the beneficiary of a bequest, surtax amounting to
	30% shall be levied as inheritance tax.
k. Tax Credit
	(1) Gift Tax Credit
			A gift tax credit is granted for a gift property that is included as a part of the
			inheritance property.
	(2) Foreign Tax Credit
			A foreign tax credit is granted to the tax amount paid to a foreign country as an
			inheritance tax.
	(3) Credit Granted for Inheritances that are successively passed through the
		Generations in a Short Period of Time
			If the inheritance property is passed onto the second generation within 10 years
			of the commencement of the inheritance for the first generation, a progressive
			credit is granted to the second generation inheritor or legatee of the inheritance
			property.
				Period of inheritance				Rate of Progressive Credit
			within 1 year					100%
			within 2 year					90%
			within 3 year					80%
			within 4 year					70%
			within 5 year					60%
			within 6 year					50%
			within 7 year					40%
			within 8 year					30%
			within 9 year					20%
			within 10 year					10%
	(4) Credit Granted for Correct Tax Returns
			A 10% credit is granted to those taxpayers that submit their tax returns on time.
l. Return and Payment
	(1) Return
		A person who acquires property by inheritance, bequest, or gift must file a tax return
		within 6 months after the commencement of the inheritance or gift, together with
		detailed statements about the amount to be deducted. The government determines
		the taxable value based on the tax return filed.
	(2) Cash Payment
		Payments can be made in cash installments for three to ten years.
	(3) Payment in Assets
		Where the portion of the real estate or securities out of the gift property is more than
		50% and the inheritance tax exceeds 10 million won, it is possible to pay by a
		transfer of real estate or securities.
m. Evaluation of Inherited or Donated Properties
	(1)   In principle, inherited and donated properties are evaluated by the market price
		prevailing at the time of inheritance or donation.
	(2)   The following methods of evaluation are applied when the market price is not available.
		(a) Land: Official land value set for an individual piece of land
		(b) Buildings:  Standard market value set by the NTS
		(c) Stocks:
			(i) Listed stocks:
				The average market price of four months, two before and two after the transaction
			(ii) Over-the-counter stocks:
				The average market price of four months, two before and two after the transaction
			(iii) Unlisted stocks:
				Evaluated by considering the higher of Net Asset Value or Profit Value, where:
				-	Net Asset Value = Net Asset Amount / Total Stock Issued
				-	Profit Value = The Weighted Average of the Net Profit Per Capita for the Last
					Three Years / Rate Determined by the NTS
n. Determination and Adjustment
	The government shall determine and notify the inheritor or the legatee of an adjustment of
	the tax base and tax amount of the inheritance and gift tax within 6 months from the date
	of the tax return.