The Ministry of Economy and Finance announced on the 19th that it will submit a ‘draft bill on inheritance tax and gift tax law revisions’ to the National Assembly in May following the announcement of the introduction of inheritance tax.
The ministry decided to undergo a 40-day legislative notice period before submitting the bill to the National Assembly. The legislative notice period is from today until the 28th of next month.
Earlier, the ministry noted on the 12th that it plans to transition the inheritance tax system from the current estate tax to inheritance tax. This method does not tax the estate left by the deceased but instead taxes the assets received by individual heirs.
As economic scale has increased and issues have accumulated, such as cases where heirs have to sell their home after a spouse’s death, the intention is to reduce the tax burden on heirs to some extent.
The government will expand the child deduction from 50 million won to 500 million won, allowing families with multiple children to lessen their tax burden. The spouse deduction limit will be raised from the existing flat 500 million won to 1 billion won, allowing deductions even if it exceeds the legal inheritance share. Additionally, a minimum human deduction threshold is set so that up to 1 billion won of inherited property combined with spouses and children is tax-exempt.
The government plans to prepare for the enforcement of the revised bill in 2028. However, it is uncertain whether the restructuring plan will overcome opposition from the opposition party and pass through the National Assembly plenary session, as inheritance taxes are expected to decrease significantly.