Money given within ten years of death comes back into the estate — why a ₩200M gift saved ₩0
An estate of ₩1B with no spouse and one child pays ₩87.3M in inheritance tax if everything is inherited. Gifting ₩200M first costs ₩19.4M in gift tax, but if the inheritance opens within ten years the ₩200M is added back to the estate, and even after crediting the gift tax already paid the total stays at ₩87.3M. The saving is ₩0. Past ten years there is no add-back, inheritance tax falls to ₩48.5M, the total with gift tax is ₩67.9M, and ₩19.4M is saved.
Conditions used in the video
- Estate
- ₩1B
- Family
- no spouse · one child
- Prior gift
- ₩200M (₩50M deduction for an adult child)
- Add-back period
- heirs 10 years · non-heirs 5 years
- Add-back value
- market value on the gift date
- Inheritance deduction
- lump-sum deduction ₩500M
Results
- Everything inherited
- inheritance tax ₩87.3M
- ₩200M gifted, inheritance within 10 years
- total ₩87.3M, saving ₩0
- Gift tax
- ₩19.4M (credited when added back)
- Inheritance after 10 years
- total ₩67.9M (inheritance tax ₩48.5M + gift tax ₩19.4M) · ₩19.4M saved
- Grandchildren and other non-heirs
- 5-year add-back
- Add-back value
- market value on the gift date (later gains excluded)
At a glance
Within ten years the inheritance tax plus gift tax equals the all-inherited figure; past ten years it falls by ₩19.4M.
- Everything inherited₩87.3M
- Gift, inheritance within 10 years (added back)₩87.3M
- Gift, inheritance after 10 years₩67.9M (inheritance tax ₩48.5M + gift tax ₩19.4M)
Why it works this way
Gifting ₩200M to a child in advance looks like it should cut inheritance tax, but if the inheritance opens within ten years it cuts nothing. The ₩200M comes back into the estate.
₩500M lump-sum deduction → taxable ₩500M → computed tax ₩90M → 3% filing credit.
- Estate₩1B
- Lump-sum deduction₩500M
- Inheritance tax₩87.3M
Gifting ₩200M first means ₩19.4M in gift tax after the ₩50M deduction. But if the inheritance opens within ten years, the ₩200M is added back to the estate. The gift tax already paid is credited, yet the total stays at ₩87.3M and the saving is ₩0.
Inheritance and Gift Tax Act Article 13(1) · Article 28.
- Within 10 years₩200M added back · ₩19.4M gift tax credited → total ₩87.3M · saving ₩0
- After 10 yearsno add-back → inheritance tax ₩48.5M · total with gift tax ₩67.9M
- Difference₩19.4M
For non-heirs such as grandchildren the period is five years. The add-back uses the gift-date market value, so later gains stay out.
The legal basis
Drawn from government announcements and the statutes themselves as primary sources, covering only the relevant part.
Inheritance and Gift Tax Act Article 13(1) (Taxable value of the estate)
In force Current (checked 2026-09-05)
Property gifted by the decedent to an heir within ten years before the inheritance, and to a non-heir within five years, is added to the estate.
What this means
Money given in advance comes back within ten years. The date of the gift sets the inheritance tax.
Inheritance and Gift Tax Act Article 28 · Article 60(4) (Gift tax credit · Add-back value)
In force Current (checked 2026-09-05)
Gift tax on the added-back property is credited against the computed inheritance tax. The added-back value is the market value on the date of the gift.
What this means
Not paid twice, but not reduced either. Since later gains stay out, giving appreciating assets first still has meaning.
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 Gift vs Inheritance Tax Comparison
Frequently asked
Is gift tax paid twice if the inheritance opens within ten years?
No. Inheritance tax is computed with the gift added back, and the ₩19.4M gift tax already paid is credited. It is not paid twice, but the total does not fall either.
If the gifted home rose in value, is the higher value added back?
No. The add-back uses the market value on the gift date. Later appreciation does not enter the estate.
How many years for a gift to a grandchild?
Property given to a non-heir is added back for five years. A generation-skipping gift carries a surcharge, though.
Do the numbers change with a spouse?
Yes. A spousal deduction is added and the inheritance tax itself changes. This page covers the case of no spouse and one child.
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.