Korean inheritance tax is set by deductions, not by the size of the estate
With a surviving spouse and children, the ₩500M lump-sum deduction plus the ₩500M minimum spouse allowance cover ₩1bn, so the tax is zero. A ₩1.5bn estate pays ₩87.3M, but the same ₩1.5bn with no surviving spouse pays ₩232.8M.
Conditions used in the calculation
- Estate to be passed on
- ₩1.5bn
- Debts and funeral costs
- ₩0
- Surviving spouse
- Yes
- Children
- 2
- Amount the spouse actually receives
- ₩0 (₩500M floor applies)
- Filing
- On time (3% filing credit)
Results
- Lump-sum deduction
- ₩500M
- Spouse allowance
- ₩500M
- Total deductions
- ₩1bn
- Taxable base
- ₩500M
- Tax before credits
- ₩90M
- Filing credit
- ₩2.7M
- Tax payable
- ₩87.3M
At a glance
Estate of ₩1.5bn, two children, filed on time. Deductions come to ₩1bn with a surviving spouse and ₩500M without one.
- ₩1bn · spouse₩0
₩1bn of deductions covers the whole estate
- ₩1.5bn · spouse₩87.3M
- ₩1.5bn · no spouse₩232.8M
2.7x
Why it works this way
Most people start with "how much do I have to inherit before tax kicks in?" But this tax is decided by the **deductions** long before the size of the estate matters.
If deductions exceed the estate, the taxable base is zero, and then it does not matter what the rate is, because the tax is zero. So "where does tax start?" is really the same question as "how large are my deductions?"
This is the case where both a spouse and children survive.
- Lump-sum deduction₩500M (Article 21)
- Spouse allowance₩500M minimum (Article 19(4))
- Total₩1bn
This is all the "no inheritance tax up to ₩1bn" line really means. There is no special exemption, just two deductions added together.
We ran it on Suikbang: an estate of ₩1.5bn, a surviving spouse, and two children.
Deductions of ₩1bn leave a taxable base of ₩500M. At the 20% band that is ₩90M before credits; filing on time takes off 3%, or ₩2.7M, leaving **₩87.3M**.
Had the estate been ₩1bn, the deductions would have covered all of it: taxable base zero, tax zero. The extra ₩500M is what created the ₩87.3M.
There is both a floor and a ceiling.
- RuleThe amount the spouse actually inherits
- Floor₩500M even if the spouse receives nothing
- CeilingStatutory share limit, or ₩3bn, whichever is lower
Because of the floor, ₩500M comes off even when the spouse takes nothing. Because of the ceiling, giving the spouse everything does not deduct anything above the statutory share.
That is why the single biggest swing in this tax is **whether a spouse survives**.
Take the same ₩1.5bn and the same two children, but no surviving spouse: only the ₩500M lump-sum deduction applies. The taxable base becomes ₩1bn, which pushes it into the 30% band, and the tax payable is **₩232.8M**. Not a won of difference in the estate, and 2.7 times the tax.
Three common cases.
- Spouse inherits aloneThe lump-sum deduction does not apply (Article 21(2))
- No surviving spouseOnly ₩500M comes off
- Filed lateThe 3% credit is gone
Where the spouse is the sole heir, deductions fall back to the ₩200M basic deduction plus personal deductions. "Give everything to the spouse" is not always the cheaper route.
There are also deductions that stack on top. Net financial assets (deposits, listed shares) bring 20% of their value, capped at ₩200M (Article 22), and a home you lived in with the deceased for ten years is deducted in full up to ₩600M (Article 23-2).
The co-residence home deduction moves the bill more than any other in practice, but it demands ten continuous years of living together, ten continuous years as a one-house household, and that the heir owns no home at the date of death, which is why it is so often disputed.
So the size of the estate alone does not give you an answer. Whether a spouse survives, how many children there are, and who receives what will separate ₩0 from ₩232.8M on the same estate. The fastest way to find out which side you are on is to put your own numbers in.
The legal basis
Drawn from government announcements and the statutes themselves as primary sources, covering only the relevant part.
Inheritance Tax and Gift Tax Act, Article 21 (Lump-sum deduction)
In force In force
Where inheritance commences on the death of a resident, the deduction shall be the greater of the sum of the deductions under Article 18(1) and Article 20(1), or ₩500 million. Where no inheritance tax base return is filed under Article 67, ₩500 million shall be deducted. Paragraph (1) shall not apply where the spouse of the decedent inherits alone.
What this means
The greater of (basic ₩200M + personal deductions) or ₩500M. In most households the ₩500M wins. 🔴 **Where the spouse is the sole heir this article does not apply at all.**
Same Act, Article 19 (Spouse inheritance allowance)
In force In force
The amount actually inherited by the surviving spouse shall be deducted from the taxable estate. Where that amount exceeds the lower of the statutory share limit and ₩3 billion, the lower amount shall be deducted. Where the amount deductible under paragraph (1) is less than ₩500 million, ₩500 million shall be deducted.
What this means
What was actually received is the rule, but with a **₩500M floor and a ceiling at the lower of the statutory share limit and ₩3bn**. Nothing received still deducts ₩500M; everything received still deducts nothing above the statutory share.
Same Act, Article 26 (Inheritance tax rates)
In force In force
Up to ₩100M: 10%. Over ₩100M to ₩500M: ₩10M plus 20% of the excess over ₩100M. Over ₩500M to ₩1bn: ₩90M plus 30% of the excess over ₩500M. Over ₩1bn to ₩3bn: ₩240M plus 40% of the excess over ₩1bn. Over ₩3bn: ₩1.04bn plus 50% of the excess over ₩3bn.
What this means
A ₩500M base sits at the top of the 20% band, giving ₩90M. With no spouse the base becomes ₩1bn, which lands in the 30% band at ₩240M. Losing a deduction raises the rate as well as the base.
Same Act, Article 22 (Financial asset deduction) and Article 23-2 (Co-residence home deduction)
In force In force
Where net financial assets exceed ₩20 million, the greater of 20% of their value or ₩20 million is deducted, capped at ₩200 million. For a co-residence home, 100% of the value of the inherited home (net of secured debt) is deducted up to ₩600 million, provided the heir lived with the decedent continuously for ten years, the household held one house throughout that period, and the heir owns no home at the date of death.
What this means
Stacking these two lifts the zero-tax range further. The co-residence deduction changes the bill the most but its conditions are strict, and it is frequently disputed.
Same Act, Article 69(2) (Filing credit)
In force In force
Where the inheritance tax base is reported within the filing deadline, an amount equal to 3/100 of the calculated inheritance tax less any tax credits shall be deducted.
What this means
The deadline is six months from the end of the month in which the death occurred. Here it took ₩2.7M off the ₩90M. **Miss the deadline and this credit disappears.**
Run it on your own numbers
The calculator opens with these conditions already filled in. Change the figures and your own case comes straight out.
Open the Inheritance Tax Calculator
Frequently asked
At what point does Korean inheritance tax start?
Where both a spouse and children survive, the ₩500M lump-sum deduction plus the ₩500M minimum spouse allowance bring the taxable base to zero up to ₩1bn, so there is no tax. That is the answer for the common case only. With no surviving spouse it starts at ₩500M, and where the spouse inherits alone the lump-sum deduction is unavailable and the threshold changes again.
Does the spouse allowance still apply if the spouse receives nothing?
Yes. Article 19(4) provides that where the deductible amount is less than ₩500 million, ₩500 million shall be deducted. The calculation on this page does exactly that: the spouse receives ₩0 and ₩500M is still deducted.
Does giving everything to the spouse reduce the tax?
Not necessarily. The spouse allowance is capped at the statutory share limit, so anything above it is not deducted, and where the spouse inherits **alone** the ₩500M lump-sum deduction is unavailable entirely (Article 21(2)). The same assets are also taxed again when the spouse later dies.
Why is ₩87.3M the answer on ₩1.5bn?
Deducting ₩1bn leaves a taxable base of ₩500M, which is the top of the 20% band and gives ₩90M before credits. Filing on time deducts 3%, or ₩2.7M, leaving ₩87.3M.
Do large deposits reduce the tax?
They do. Where net financial assets (financial assets less financial debts) exceed ₩20M, the greater of 20% of their value or ₩20M is deducted, capped at ₩200M (Article 22). Shares held by a largest shareholder, and assets held in another person's name that were not reported by the filing deadline, are excluded.
What if I inherit the home I lived in with my parent?
The co-residence home deduction can take the full value of the home, capped at ₩600M (Article 23-2). It requires ten or more continuous years of living together, one house held by the household throughout that period, and the heir owning no home at the date of death. The conditions are strict and disputes are common.
What happens if I file late?
The 3% filing credit under Article 69(2) is lost (₩2.7M in this example), and penalties for non-filing or under-reporting plus late-payment interest apply on top. The deadline is six months from the end of the month in which the death occurred.
Results are estimates based on the inputs and on the rules as at the stated date. They may differ from a lender's actual assessment, and the rules change often. Take professional advice before any decision that matters.