SEJONG, Oct. 25 (Korea Bizwire) — An average of about 60 trillion won (US$53.09 billion) worth of wealth has been transferred or handed down every year since 2003, but less than half of the recipients had to pay taxes, data showed Wednesday.
According to records from the National Tax Service that were analyzed by the office of Rep. Park Gwang-on for parliamentary audits, 251.56 trillion won of various assets were inherited by 2.73 million people in the 2003-2016 period. During the same period, 281.87 trillion won of wealth was transferred as gifts to 2.1 million people. The sums average at 59.27 trillion won of assets changing hands every year.
Taxes collected from such transfers, however, have been small in comparison, mostly due to the various exemptions available, data showed.
In the case of inheritance tax, only 53,000 people paid the government, accounting for just 1.9 percent of all inheritors. Likewise, only 45.1 percent, or 949,000 people, who were given assets as gifts paid taxes. In monetary terms, 83.44 trillion won was collected as inheritance tax and 130.9 trillion won as gift tax. This left 319.49 trillion won untaxed.
South Korea has a number of exemptions on inheritance and gift taxes, including minimum 500 million-won write-offs if the wealth is transferred to a spouse. Asset transfers in the form of gifts are also given up to 600 million won in tax exemptions when given to a spouse. Other write-offs are also available depending on the number of children.
Data showed that 65.9 percent of wealth inheritance was real estate. Financial assets — 17.2 percent — and stocks — 11.3 percent — followed.
Real estate was also the top type of asset transferred as a gift at 48.8 percent. Financial assets accounted for 23 percent and stocks 21.7 percent.