Korea May Amend its Inheritance Tax System in 2025

Korea has one of the highest effective inheritance tax rates in the world and one of the most complicated inheritance processes in the world. The present Korean Administration, realizing this reality, is attempting to amend Korean law to place the Korean Inheritance System more in line with international norms and to lower the effective tax burden on inheritors. IPG Legal is looking forward to a comprehensive amendment, also, to the laws related to the Korean legal reserve of inheritance based on recent Korean court precedent.

One peculiar anachronism to Korean inheritance law is the inheritance tax is on the estate itself versus the tax of the inheritor of the asset. The Korean Finance Minister held a press conference noting that the government is studying how to amend the law to move from the present archaic inheritance tax to an inheritance acquisition tax system.

“To enhance fairness and ensure consistency in taxation, as well as align with global trends, the government plans to shift to an inheritance acquisition tax system. . .. As the inheritance acquisition tax is imposed on the assets each beneficiary receives, determining the tax base of the different beneficiaries is crucial. Advanced countries set the tax base using methods like wills, statutory shares, and agreed-upon divisions. In light of these practices, we are reviewing our civil law and property division methods to accurately reflect actual value of inherited assets.”

Sang-mok CHOI
Minister, Ministry of Economy & Finance/Deputy Prime Minister

We shall update the reader when more information is known. Please check out IPG’s Korean Family Law & Inheritance Law Archive.

IPG Legal Korean Inheritance Law & Inheritance Tax Experience

IPG Legal is a leading law firm assisting international families with estate planning and inheritance matters in Korea. IPG Legal handled over our two decades working on inheritance matters for expats, international families, foreign-based families, family offices, and trusts some of the most noteworthy and complicated issues facing families including matters where inherited assets of heirs were in multiple jurisdictions; matters concerning adopted heirs not registered in the Korean family registry; will challenges; and complicated multi-jurisdictional disputes.

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