[Alpha Biz= Paul Lee] The South Korean government has decided to overhaul its inheritance tax system for the first time in 75 years, switching from a total estate-based tax (estate tax) to an individual inheritance-based tax (inheritance acquisition tax). This reform is expected to reduce the tax burden significantly, especially benefiting families with multiple children.



Under the new system, tax will be levied on each heir’s actual share of the inheritance, rather than on the entire estate. As a result, families with more heirs will enjoy greater tax benefits.



For example, under current law, if a spouse and two children inherit a combined 2 billion KRW (approx. $1.5 million), they would owe approximately 130 million KRW in inheritance tax. Under the new scheme, this amount would drop to zero.



On May 20, the government finalized this reform during a Cabinet meeting held at the Government Complex in Seoul, presided over by Acting President and Education Minister Lee Ju-ho. The amendment to the Inheritance and Gift Tax Act was proposed by the Ministry of Economy and Finance in March, underwent a 40-day legislative preview period, and has now been officially confirmed.

 

 

 

 

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