Korean Inheritance Tax Calculator

This works out the inheritance tax on an estate. Enter the value of the estate and its debts, whether there is a surviving spouse and how much the spouse actually takes, the number of children, net financial assets, whether a cohabiting-home deduction applies, and whether you will file on time, and it shows each deduction, the tax base and rate, the tax before credits, the filing credit, and the amount due.

The rate table alone, running from 10% to 50%, looks frightening, but deductions are what decide the bill. In the common case of a surviving spouse and children, the ₩500 million lump-sum deduction and the minimum ₩500 million spouse deduction together mean no tax at all on an estate up to ₩1 billion. Half of this calculator's work is stacking those deductions the way the statute does.

Children who roughly know the size of their parents' estate and want to know whether it is the kind that pays inheritance tax. If it sits within the deductions there is no tax, though filing anyway can fix the acquisition cost for later sales. If it exceeds them, the heirs need the figure to decide how to divide the estate and how much cash to set aside.

For those whose inheritance has already begun, timing matters. The return is due within 6 months from the end of the month in which the inheritance started, and filing on time earns a 3% credit on the tax. Missing it loses that credit and also blocks the basic and personal deductions in favour of the lump sum only, so it pays to get a rough figure soon after the death.

The calculation follows 상속세 및 증여세법 in order. Debts and funeral costs come off the estate to give the taxable value. Four deductions follow. The lump-sum deduction in 제21조 is the greater of ₩500 million and the basic deduction of ₩200 million (제18조) plus ₩50,000,000 per child (제20조), fixed at ₩500 million if no return is filed. The spouse deduction in 제19조 allows what the spouse actually receives, within the statutory share and ₩3 billion, with ₩500 million guaranteed when the spouse takes less than that. The financial-asset deduction in 제22조 is 20% of net financial assets (the full amount up to ₩20,000,000, capped at ₩200 million), and the cohabiting-home deduction in 제23조의2 removes the value of a home shared for 10 years or more, up to ₩600 million.

Total deductions come off the taxable value to give the tax base, and the progressive rates in 제26조 apply: 10% up to ₩100 million, rising to 50% above ₩3 billion. The statute is written as "₩10 million plus 20% of the excess over ₩100 million", and the progressive-deduction form gives the same result. Subtracting the 3% filing credit under 제69조 gives the tax due.

Take an estate of ₩1.5 billion with no debt, a surviving spouse and two children, with the spouse taking no separate share. The lump-sum deduction is the greater of ₩500 million and ₩200 million plus two times ₩50,000,000, so ₩500 million. The spouse receives less than ₩500 million, so the guaranteed ₩500 million applies. Deductions of ₩1 billion leave a tax base of ₩500 million; 20% of that is ₩100 million, less the ₩10,000,000 progressive deduction, for ₩90 million before credits. Filing on time takes off 3%, or ₩2.7 million, leaving ₩87.3 million to pay.

If ₩300 million of that estate were net financial assets such as bank deposits, a further 20%, or ₩60 million, would come off as the financial-asset deduction. The tax base would be ₩440 million, the tax before credits ₩78 million, and after a ₩2.34 million filing credit the amount due ₩75.66 million. Leave the financial-asset field empty and that whole deduction is lost.

The most common is skipping the deductions and applying a rate to the whole estate. Multiplying ₩1.5 billion by the rate for its bracket produces a number several times the real tax and serves only to frighten. The second is assuming the spouse deduction is always the ₩500 million minimum. If the spouse actually takes more, the deduction grows with it within the statutory share and ₩3 billion, so on a larger estate the spouse's share changes the tax substantially.

The third is believing the deductions are the same whether or not you file. Without a return you get only the ₩500 million lump sum, cannot add the per-child deductions, and receive no filing credit. The fourth is forgetting what this calculator leaves out: gifts made within ten years before the death that are added back, the deductions for minors, the elderly and the disabled, and the restriction on the lump sum when the spouse is the sole heir. If any of those apply, the result will differ, so confirm with a tax adviser.