How Korean Gift Tax Is Calculated: Child Deductions and Rate Brackets

An adult child can receive up to 50 million won from a parent gift-tax-free over ten years. A minor child's limit is 20 million won, and between spouses it is 600 million won. On top of that, receiving a gift within two years of a marriage registration or a child's birth adds a combined 100 million won — so an adult child can be handed up to 150 million won tax-free. Only the amount above these limits is taxed at 10–50%.

According to Connect Tax Accounting's summary of family gift-tax exemption limits, all of these deductions are summed and reset on a ten-year cycle. Once you know the order, the math is not hard.

How Much Can You Give Tax-Free?

Gift tax is assessed on the recipient, with deduction limits set by their relationship to the giver. The limits below are all 'summed over ten years.'

There is a separate marriage/childbirth gift deduction. An adult child receiving a gift within two years of a marriage registration or within two years of childbirth gets a combined 100 million won added. Combined with the basic 50 million won, up to 150 million won becomes tax-free.

Rates, Progressive Deductions and the Tax Owed

The amount left after deductions is the tax base; multiply it by the rate, then subtract the progressive deduction to get the tax owed. The National Tax Service's published inheritance and gift tax rate table is a five-tier progressive structure.

The formula is one line: tax owed = tax base × rate − progressive deduction. File on time (within three months of the end of the month the gift was received) and you get back 3% of the tax owed as a filing credit.

Gift tax is not levied on the whole amount given, but only on the base left after deductions — miss this order and you will fear double the tax you actually owe.

What Does a Gift to an Adult Child Actually Cost?

Assuming a cash gift to an adult child (applying the 50 million won deduction), here is the tax computed by gift size. Tax base = gift − 50M won; tax owed = base × rate − progressive deduction; then subtract the 3% filing credit.

Take the 200M won case: a base of 150M won × 20% = 30M won, minus the 10M won progressive deduction = 20M won owed, minus 3% (0.6M won) = 19.4M won. If the child is within two years of marriage or childbirth, the deduction rises to 150M won, so the base for the same 200M won gift falls to 50M won and the tax drops to around 5M won. If you plan to pass down real estate too, the acquisition-stage tax overlaps, so it helps to check the acquisition tax order first.

Ten-Year Aggregation and Filing — Easy to Miss

The deduction limit is not 'once' but a total 'over ten years.' If you received 30M won from your father five years ago, only 20M won of the adult-child deduction remains now. Aggregation is by giver, but parents count as one — a father and mother each giving 50M won does not make the deduction 100M won.

Filing is due within three months from the end of the month the gift was received. Even if the tax is zero, filing within the deduction limit helps establish a record of the source of funds. This 'order and deadline' judgment mirrors how you read the sequence of property taxes and the deduction and rate brackets of the comprehensive real estate tax.

What to Check

• First add up what you received from the same giver over the past ten years — the remaining deduction is the starting point for this calculation.
• If within two years of marriage or childbirth, secure the requirements (timing, relationship) for the extra 100M won combined deduction.
• Verify it yourself in order: tax base = gift − deduction, tax owed = base × rate − progressive deduction.
• File within the deadline (three months) to claim the 3% credit, and consider filing even at zero tax for a fund-source record.
• For a real-estate gift, weigh acquisition tax and future capital gains tax separately from gift tax.

References

• National Tax Service — Inheritance and Gift Tax Rates
• Connect Tax Accounting — Family Gift-Tax Exemption Limits (2026)